KMVSTDCL funds reached Rahul Gandhi's house, alleges Karnataka BJP
Synopsis
BJP leader B. Sriramulu has alleged that ₹89 crore misappropriated from the KMVSTDCL — a tribal welfare body — found its way to Rahul Gandhi's residence, an explosive charge that the Congress has not addressed. With the accused minister Nagendra back in Karnataka's Cabinet, the BJP is turning up the heat with a 10-day statewide padayatra starting 1 September.
Key Takeaways
Sriramulu alleged on 25 August that KMVSTDCL funds were routed to Rahul Gandhi's residence.
The Valmiki Corporation scam came to light in May 2024 after the suicide of corporation superintendent Chandrasekar P. , aged 52 .
The ED and CBI have pegged total misappropriated funds at approximately ₹89 crore .
Funds were allegedly diverted through bogus accounts at Union Bank of India's MG Road branch, Bengaluru , and shell cooperatives in Hyderabad .
BJP has announced a 10-day padayatra from Raichur (1 September) to Ballari (10 September), led by B.Y.
Accused minister Nagendra has returned to the Karnataka Cabinet as Minister for Planning and Statistics ; BJP and JD(S) demand his removal.
Former Karnataka Minister and Bharatiya Janata Party (BJP) leader B. Sriramulu on Tuesday, 25 August alleged that funds reportedly misappropriated from the Karnataka Maharshi Valmiki Scheduled Tribes Development Corporation Limited (KMVSTDCL) were routed to the residence of Congress leader Rahul Gandhi. Sriramulu made the allegations while addressing media at the BJP state headquarters, Jagannatha Bhavan, in Bengaluru.
The Allegation and Assembly Protests
Sriramulu claimed that BJP legislators had raised slogans inside the Karnataka Assembly asserting that misappropriated Valmiki Corporation funds had reached Rahul Gandhi's residence. He further alleged that the state government curtailed the Assembly session in response to the BJP's protests over the issue — a charge the ruling Congress has not publicly addressed.
Sriramulu accused Congress leaders of shedding 'crocodile tears' over Dalit issues, alleging that the party 'has betrayed Babasaheb Ambedkar, Babu Jagjivan Ram and the Dalit community.'
BJP's 10-Day Padayatra Announced
In a direct political escalation, Sriramulu announced that the BJP will undertake a 10-day padayatra beginning 1 September in Raichur and concluding on 10 September in Ballari. The march will be led by Karnataka BJP president B.Y. Vijayendra, alongside party leaders Gali Janardhana Reddy, R. Ashoka, Bangaru Hanumantu, and others.
'The padayatra will highlight issues including the government's alleged negligence towards irrigation, corruption in the ST Corporation and the Valmiki Corporation issue. The Congress has been neglecting Dalits,' Sriramulu said.
What the KMVSTDCL Scam Involves
The Valmiki Corporation scam came to light in May 2024 following the suicide of 52-year-old corporation superintendent Chandrasekar P., who left a note detailing unauthorised fund transfers and corruption. Investigative agencies — the Enforcement Directorate (ED) and the Central Bureau of Investigation (CBI) — have pegged the total misappropriated and diverted funds at approximately ₹89 crore.
According to probe agencies, funds earmarked for tribal welfare projects were illegally moved into unauthorised bank accounts — including bogus accounts opened using forged KYC documents at the Union Bank of India's MG Road branch in Bengaluru — and subsequently layered through shell cooperatives such as Hyderabad's First Finance Credit Cooperative Society.
Nagendra's Return to Cabinet Draws Fire
The then-Karnataka Minister for Scheduled Tribes Welfare, identified by probe agencies as a primary mastermind in the layering and siphoning of funds, had previously resigned from the Cabinet, faced arrest, and later secured bail. That minister, Nagendra, has since returned to the state Cabinet — led by Chief Minister D.K. Shivakumar — taking charge as Minister for Planning and Statistics.
Both the BJP and the Janata Dal (Secular) [JD(S)] have announced they will continue to agitate until Nagendra is removed from the Cabinet. The opposition's padayatra is the latest escalation in what has become a sustained political battle over accountability in the scam.
Point of View
As yet, unsupported by any probe agency finding cited in the public record — it remains an assertion, not an established fact. What is documented is the ₹89 crore diversion through bogus accounts and shell cooperatives, and the more uncomfortable question for the Congress government is why Nagendra — identified by the ED and CBI as a primary mastermind — has been reinstated to the Cabinet at all. The BJP's padayatra is shrewd optics: it frames the scam as a Dalit betrayal narrative ahead of local elections, while the Congress is left defending a Cabinet reshuffle that hands the opposition its best talking point in months.
NationPress
25 Aug 2026
Frequently Asked Questions
What is the KMVSTDCL scam?
The KMVSTDCL scam refers to the alleged illegal diversion of approximately ₹89 crore from the Karnataka Maharshi Valmiki Scheduled Tribes Development Corporation Limited, a body meant to fund tribal welfare. The scam came to light in May 2024 after corporation superintendent Chandrasekar P., 52, died by suicide, leaving a note detailing unauthorised fund transfers.
What has BJP leader Sriramulu alleged about Rahul Gandhi?
B. Sriramulu alleged on 25 August that funds misappropriated from the KMVSTDCL were routed to the residence of Congress leader Rahul Gandhi. The allegation was made at a press conference in Bengaluru; no probe agency has publicly corroborated this specific claim.
What is the BJP's padayatra about and when does it start?
The BJP has announced a 10-day padayatra beginning 1 September in Raichur and ending 10 September in Ballari, led by Karnataka BJP president B.Y. Vijayendra. It aims to highlight the Valmiki Corporation scam, alleged government neglect of irrigation, and what the party calls the Congress's failure to protect Dalit interests.
Who is Nagendra and why is he controversial?
Nagendra was the Karnataka Minister for Scheduled Tribes Welfare and has been identified by the ED and CBI as a primary mastermind in the KMVSTDCL fund diversion. He resigned from the Cabinet, was arrested, and later secured bail. He has since been reinducted into the Cabinet led by Chief Minister D.K. Shivakumar as Minister for Planning and Statistics, drawing sharp protests from the BJP and JD(S).
How were the KMVSTDCL funds allegedly diverted?
According to investigative agencies, funds meant for tribal welfare were moved into unauthorised accounts — including bogus accounts created with forged KYC documents at Union Bank of India's MG Road branch in Bengaluru — and then layered through shell cooperatives such as Hyderabad's First Finance Credit Cooperative Society.
