The Criminal Investigation Department (CID) on Monday arrested Indian Civil Accounts Service (ICAS) officer Sandeep Dash in a multi-crore mutual fund scam in the Bangalore Development Authority (BDA).
The CID officials said Dash, who was the financial member of the BDA between May 1997 and May 2005, is the kingpin of the scam and had transferred around Rs 2,202 crore of BDA money to temporary bank accounts and later invested in mutual funds.
The CID officials said that the investigation established that Dash, presently Comptroller of Accounts with Mizoram government, was the first to invest the BDA money in mutual funds. The official opened temporary bank accounts in Indian Overseas Bank during 1999 without taking prior approval from the BDA.
The bank accounts were also not shown in the accounts of the BDA and Dash instructed the banks to transfer the money from the BDA account to the temporary account.
“Dash gave oral instructions to the banks to transfer the money from the BDA account to the temporary bank accounts. Later, through pay order and banker’s cheque, money was invested illegally in mutual funds. The amount thus invested by him in mutual funds was around Rs 2,202.90 crore. During this period, Dash had also transferred Rs 5.54 crore to Coffee Board. His wife Sharada Subramanyam was a finance director with the Coffee Board then. Further probe into the role played by Dash is on,” a senior official said.
The CID has also arrested retired Joint Comptroller (State Accounts Department) and former financial member of the BDA M N Sheshappa and suspended BDA cashier C Vasanth Kumar in the case.
According to the CID, Sheshappa, who succeeded Dash as financial member of the BDA between June 2006 and June 2008, opened two temporary accounts in Indian Overseas Bank and one account in Corporation Bank. The investigation so far has revealed that Sheshappa transferred around Rs 567.55 crore to these temporary accounts and from there, invested in mutual funds through brokers. The CID probe revealed that Sheshappa had illegally transferred Rs 3 crore to Bangalore Metro Rail Corporation (BMRCL) and Rs 2.12 crore to Karnataka Backward Class Department Building Construction Society.
The CID arrested Sheshappa in the case registered against him in the Wilson Garden police station (323/2014). All the three accused have been taken into police custody and interrogation is on, the official said. “The probe has revealed that BDA suffered losses to the tune of hundreds of crores over the years. The probe has also revealed that the Coffee Board and Karnataka Backward Class Department Building Construction Society have also illegally invested in mutual funds. Investigation is in progress in this regard also,” the official said.