CID to investigate diversion of BDA money to mutual funds

Three officials named in multicrore scam, initial loss put at Rs 19 cr

The State government has ordered a probe by the Criminal Investigation Department (CID) into the multi-crore scam in the Bangalore Development Authority (BDA) where in three officials had illegally diverted money from the BDA’s account to mutual funds run by a private life insurance company.

The BDA’s Financial Member K N Gangadhar had filed a complaint with the Seshadripuram police in November 28, 2014, in connection with scam between 1999 and 2008. Subsequently, Bangalore Police Commissioner M N Reddi had entrusted the probe to the City Crime Branch (CCB).

The State government has now handover the case to the CID for a detailed investigation as crores of rupees have been swindled, official sources said.

The Comptroller and Auditor General in July 2014 brought to the notice of the BDA that Rs three crore had been transferred from its account to that of Bangalore Metro Rail Corporation (BMRCL) during 2007-08, though there was no need for it. 

A shocked BDA went for an audit of its accounts. The BDA top brass decided to rope in the Karnataka Institute for Public Auditors, a forum that consists of retired government auditors, to audit its accounts, the sources said.

During the audit of the BDA’s accounts from 1997 to 2014, it emerged that Sandeep Dash, an Indian Civil Accounts Service (ICAS) officer, who was the BDA’s financial member during 1997-2005 and cashier C Vasanth Kumar had diverted funds from BDA’s main account to the mutual funds of the private life insurance company, for personal gains. The two had allegedly showed this as fixed deposits made with banks, sources said.

According to the FIR filed by the BDA with the Seshadripuram police, M N Sheshappa, who succeeded Dash as financial member, too indulged in similar irregularities in connivance with Vasanth Kumar.

Sandeep Dash had served in the BMRCL after his stint in the BDA and is said to have diverted Rs three crore from the BDA’s account to that of the BMRCL. While Sandeep Dash is now on Central deputation, Sheshappa has retired from service. Vasanth Kumar has been suspended, the sources said.

When contacted, BDA Commissioner T Sham Bhat said the audit had revealed misuse of funds.

Preliminary probe has shown that the BDA has suffered losses of Rs 19 crore. The total losses suffered by the agency is yet to be ascertained. The money from the BDA’s fixed deposits were withdrawn and invested in the mutual funds by these officials, who made profits at the cost of the BDA, he added.

Meanwhile, sources in the CCB said that they were preparing to handover the probe and all the documents related to the case in their possession to the CID.
DH News Service