What Did the ED Uncover in the K'taka Handicrafts Development Corporation Scam?
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Synopsis
The Enforcement Directorate's ongoing investigation into the K'taka Handicrafts Development Corporation scam reveals shocking misappropriation of funds. With Rs 3.74 crore diverted and multiple fraudulent accounts involved, the case raises serious questions about financial oversight in government agencies.
Key Takeaways
- ED attaches assets related to the K'taka Handicrafts scam.
- Fraudulent accounts were opened using forged documents.
- Rs 3.74 crore was misappropriated from KSHDCL.
- Investigation continues into the involved parties.
- Legal actions are being pursued under PMLA.
Bengaluru, Sept 11 (NationPress) The Enforcement Directorate (ED) from the Bengaluru Zonal Office has provisionally attached immovable assets valued at Rs 75 lakh belonging to Velohar Infra Private Limited. This action is taken under the Prevention of Money Laundering Act (PMLA), 2002, as part of an investigation into the misappropriation of government funds linked to the Karnataka State Handicraft Development Corporation Limited (KSHDCL), an official disclosed on Thursday.
The investigation uncovered that Rs 3.74 crore was redirected to the Venture Cottage Industrial Trade Corporation via Allahabad Bank in Chennai. The funds were subsequently withdrawn in cash and misappropriated by the involved parties.
Sateesh V Vambashe, a bank official, collaborated with J.R. Pradhan, Mohammed Rafi, Mohammed Aboobacker, and Sarath Chandran to fraudulently establish two current accounts under the name of M/s KSHDCL at the SBI Hesaraghatta Branch, utilizing forged resolutions and illicit authorization letters, according to the ED.
A total of Rs 5.01 crore belonging to KSHDCL was transferred into these fraudulent accounts.
While only Rs 25 lakh was deposited in a legitimate fixed deposit, a forged FDR for Rs 5.01 crore was fabricated and presented to KSHDCL, concealing the fund misappropriation, as revealed by the ED investigation.
Of the remaining funds, Rs 1 crore was transferred to Velohar Infra Pvt. Ltd., Chennai, and Rs 3.74 crore was rerouted to the Venture Cottage Industrial Trade Corporation at Allahabad Bank, Chennai. The ED confirmed that these proceeds were withdrawn.
Further investigation indicated that Rs 1 crore was credited to Velohar Infra Pvt. Ltd.'s account on July 30, 2018, via three RTGS transactions from the Corporation's SBI account.
From this amount, Rs 25 lakh was withdrawn in cash and given to one of the accused, while the remaining Rs 75 lakh was utilized by the company and its Director, Vijayalakshmi S, for personal and business expenditures, despite their awareness that these funds were Proceeds of Crime (PoC).
Additionally, it was found that Velohar Infra Pvt. Ltd. possesses a parcel of land measuring 32.55 cents at “Sunrise Avenue”, Sholinganallur village, Kancheepuram district, valued at Rs 3.80 crore. Consequently, the property of Velohar Infra Private Limited has been provisionally attached for Rs 75 lakh under Section 5(1) of PMLA, 2002.
Further investigations are currently underway.
Point of View
I emphasize the necessity of transparency and accountability in government financial operations. The unfolding of the K'taka Handicrafts Development Corporation scam underscores the critical need for stringent oversight mechanisms to prevent future malpractices and restore public trust.
NationPress
12/09/2025
Frequently Asked Questions
What is the K'taka Handicrafts Development Corporation scam about?
The scam involves the misappropriation of government funds amounting to Rs 3.74 crore from KSHDCL, with the Enforcement Directorate investigating fraudulent financial activities linked to the case.
Who are the main individuals involved in this scam?
Key individuals implicated include Sateesh V Vambashe, J.R. Pradhan, Mohammed Rafi, Mohammed Aboobacker, and Sarath Chandran.
What actions have been taken by the Enforcement Directorate?
The ED has provisionally attached assets of Velohar Infra Private Limited worth Rs 75 lakh and is conducting ongoing investigations into the misappropriation of funds.
What are the legal implications of this case?
The investigation falls under the Prevention of Money Laundering Act (PMLA), 2002, which seeks to combat financial crimes and hold perpetrators accountable.
How was the fraud executed?
Fraudsters opened fake accounts using forged documents and diverted substantial amounts of government funds into these accounts for personal gain.
