Bharatiya Janata Party (BJP) leader and Leader of the Opposition in the Karnataka Legislative Assembly, R. Ashoka, on Friday, 16 October 2026, alleged serious financial irregularities in the Dr. B.R. Ambedkar Development Corporation (ADCL), accusing the state government of siphoning off ₹14.95 crore meant for the welfare of Scheduled Castes through fictitious bank accounts, forged documents, and premature closure of fixed deposits. The allegations come on the heels of a supplementary prosecution complaint filed by the Enforcement Directorate (ED) before a special court in Bengaluru.

What the ED's Investigation Found

According to the ED, investigators uncovered that a fictitious current account was fraudulently opened in the name of the ADCL at the State Bank of Mysore's HAL II Stage Branch in Bengaluru using forged documents and impersonation. Subsequently, four fixed deposits of ₹5 crore each belonging to the ADCL were prematurely closed using fabricated Term Deposit Receipt/Fixed Deposit Receipt (TDR/FDR) instruments and forged pre-closure letters, allegedly resulting in the diversion of ₹14.95 crore — classified as proceeds of crime under the Prevention of Money Laundering Act (PMLA), 2002.

Further investigation revealed that these proceeds were allegedly routed through multiple bank accounts held by various individuals and entities, followed by layered transfers and cash withdrawals to conceal the funds' origins. Statements recorded under Section 50 of the PMLA indicated that funds were knowingly received, transferred, and withdrawn as part of the alleged money laundering operation, according to the agency.

Legal Action So Far

The ED's Bengaluru Zonal Office filed a supplementary prosecution complaint against five accused persons, including Ayub Sayyed and others, before the Special Court under the PMLA in Bengaluru on 5 October 2026. Notably, this follows an earlier prosecution complaint filed on 25 March 2026 against 15 accused persons and entities, in connection with which the ED had sought confiscation of assets worth ₹6.02 crore. A second Provisional Attachment Order was subsequently issued on 22 July, attaching an immovable property worth ₹24 lakh belonging to one of the accused. The ED's probe was initiated on the basis of an FIR registered by the Central Bureau of Investigation's Anti-Corruption Branch (CBI-ACB) in Bengaluru under sections of the Indian Penal Code and the Prevention of Corruption Act, 1988.

BJP's Political Offensive

Ashoka drew a direct parallel to the earlier alleged scam involving the Maharshi Valmiki Scheduled Tribes Development Corporation, arguing that the ADCL case represented another instance of financial misconduct under the Congress-led Karnataka government. He also turned his sights on Congress leader and Leader of the Opposition in the Lok Sabha, Rahul Gandhi, questioning whether the alleged diversion of welfare funds for Scheduled Castes and Scheduled Tribes was consistent with Gandhi's stated commitment to 'Nyay (justice).'

'While Rahul Gandhi spoke about social justice at the national level, the Congress government in Karnataka was allegedly misusing funds intended for the welfare of Scheduled Castes and Scheduled Tribes,' Ashoka alleged. He also criticised what he called the silence of the Congress leadership on the matter, and pledged that the BJP would continue to demand accountability until those responsible were brought to justice.

Broader Context and What Comes Next

This is the second major SC/ST welfare-fund related controversy to hit the Karnataka government in recent months, raising questions about oversight mechanisms for state-run development corporations. The Congress government in Karnataka has not yet issued a formal rebuttal to the latest allegations. With the special PMLA court now seized of a supplementary complaint and prior confiscation proceedings already underway, the legal process is expected to advance further in the coming weeks. All allegations of political culpability by the state government remain unproven and are contested.