CBI seeks Karnataka Governor’s sanction to prosecute B Nagendra in Rs 90cr case

The Central Bureau of Investigation has sought the Karnataka Governor’s sanction to prosecute state Statistics and Planning Minister B Nagendra in connection with the alleged diversion of around ₹90 crore from the Karnataka Maharishi Valmiki Scheduled Tribe Development Corporation, intensifying a political confrontation that has already disrupted the state legislature.

The request emerged as the Bharatiya Janata Party and Janata Dal (Secular) prepared to renew protests demanding Nagendra’s removal from the Cabinet. Sources cited by The Times of India said the Governor’s office had referred the sanction issue for legal opinion and that no decision had been taken as of August 24, 2026. Seeking sanction is a procedural step and does not establish criminal guilt.

The case dates back to 2024, when investigators began examining transfers from the state-owned corporation after the death of employee Chandrashekhar. The Enforcement Directorate subsequently alleged that ₹89.62 crore had been diverted into fake accounts in Andhra Pradesh and Telangana and later moved through shell entities. In an October 2024 prosecution complaint, the agency named Nagendra as the principal accused along with 24 others.

Why has the Valmiki Corporation case again become a major Karnataka political issue?

Nagendra resigned from his earlier ministerial position in June 2024 while investigations into the alleged diversion were intensifying. His later return to the Cabinet revived opposition criticism, with the BJP and JD(S) arguing that reinstating him before the legal proceedings concluded sent the wrong institutional signal.

The dispute dominated proceedings in the Karnataka legislature last week, with opposition protests disrupting business for five consecutive days. The BJP-JD(S) alliance subsequently announced plans for a demonstration at Vidhana Soudha on August 24, placing the case back at the centre of state politics rather than leaving it solely within the criminal-justice process.

The government and opposition differ sharply over the significance of the investigative material. Opposition leaders point to the CBI’s sanction request as evidence that the case remains serious, while government figures have questioned aspects of the political narrative surrounding Nagendra and argued that established legal procedures should determine the outcome.

That distinction is essential because a prosecution-sanction request is neither a conviction nor a judicial finding that an alleged offence occurred. It indicates that an investigating agency wants to take a further legal step against a serving public official and requires the applicable authorisation before doing so.

What allegedly happened to the Valmiki Corporation’s money?

The Karnataka Maharishi Valmiki Scheduled Tribe Development Corporation was established to administer programmes intended to benefit Scheduled Tribe communities. The controversy erupted after irregular transfers were detected from corporation accounts and employee Chandrashekhar died in May 2024.

The Enforcement Directorate said its investigation, which followed cases registered by Karnataka Police and the CBI, found that approximately ₹89.62 crore had been transferred into fake bank accounts across Andhra Pradesh and Telangana before being moved through additional entities. The agency alleged that parts of the money were then laundered through shell structures.

Investigators from multiple agencies have examined different aspects of the transactions, creating a case that spans alleged corruption, banking activity and money laundering. Reporting on the latest CBI development says the Karnataka government has recovered approximately ₹84 crore of the allegedly siphoned amount, although recovery of funds does not by itself resolve questions of criminal responsibility.

Nagendra and every other accused person retain the presumption of innocence unless guilt is established through the judicial process. Chargesheets, prosecution complaints and sanction applications reflect allegations and investigative conclusions that remain open to challenge in court.

Why does the Governor’s prosecution sanction matter?

Indian anti-corruption law contains safeguards governing prosecution of serving public officials, intended partly to prevent officials from facing criminal proceedings solely because of politically motivated allegations connected with official duties.

When investigators believe they possess sufficient evidence to prosecute an official covered by those protections, obtaining the required sanction can become a critical procedural stage. A refusal, approval or prolonged delay can therefore carry substantial legal and political consequences.

In Nagendra’s case, the matter is particularly sensitive because he is again a member of the Karnataka Cabinet. The Governor’s office is reportedly seeking legal advice before deciding how to proceed, while parallel sanction questions involving politicians from other parties are also under consideration.

That broader context makes the issue vulnerable to accusations of selective treatment from both sides. The strongest institutional response will depend on applying the same legal standard irrespective of party affiliation and leaving eventual findings of guilt or innocence to the courts.

Could the controversy disrupt the Karnataka government beyond the investigation itself?

The immediate political cost is already visible in the legislature. Five days of disruption over one minister can delay debate on bills, spending and other state matters even before any new prosecutorial step is authorised.

For the opposition, Nagendra’s reinstatement provides a simple political argument centred on standards for ministerial office. For the government, removing a minister merely because an investigative agency seeks sanction could establish a precedent that allows accusations alone to destabilise cabinets.

That tension means the controversy may persist even if the Governor takes time to decide. An approval would move the legal proceedings into a more consequential phase, while rejection could trigger stronger accusations from the opposition about political protection.

The decisive issue is therefore no longer whether the Valmiki Corporation investigation remains alive. The CBI’s latest move establishes that it does. The next question is whether the prosecution request receives authorisation and whether the evidence can ultimately withstand scrutiny in court.