GG News Bureau
Bengaluru, 9th June: In a major crackdown in the Karnataka Bhovi Development Corporation (KBDC) fund embezzlement case, the Enforcement Directorate (ED) has filed a chargesheet against three key accused and seized properties acquired through proceeds of the alleged crime. The Bengaluru Zonal Office of the ED filed the prosecution complaint on June 3, 2025, before the Special PMLA Court in Bengaluru against R. Leelavathi, B.K. Nagarajappa, and P.D. Subbappa.
The scam, involving misappropriation of crores of rupees from government funds, came to light following multiple FIRs registered by Karnataka Police. ED investigations revealed that then KBDC Managing Director R. Leelavathi and then General Manager B.K. Nagarajappa, in collusion with intermediaries and associates, diverted large sums of money into accounts of shell companies such as Aditya Enterprises, Somanatheshwara Enterprises, New Dreams Enterprises, Harnthiha Creations, and Annika Enterprises—all allegedly operated by Nagarajappa and his associates.
In response to the gravity of the case, the ED launched extensive search operations on April 4, 2025, targeting multiple locations, including the KBDC office at V.V. Tower in Bengaluru and residences of the accused. Following the raids, Nagarajappa was arrested on May 5, and Leelavathi on May 12, under provisions of the Prevention of Money Laundering Act (PMLA). While Nagarajappa was remanded to 14 days of ED custody, Leelavathi was granted 7 days. Both remain in judicial custody.
The investigation also found that the diverted funds were used for purchasing immovable properties, making payments to intermediaries, and transferring money to other suspicious accounts. The ED has so far attached immovable assets worth approximately ₹26.27 crore, with a market value of around ₹40 crore, linked to the accused.
The ED confirmed that the investigation is ongoing and more individuals could be implicated as new leads emerge. The agency emphasized that this action reflects the government’s zero-tolerance policy towards corruption and financial fraud.
