Bengaluru: The Directorate of Enforcement (ED) have attached immovable properties worth about Rs 26.27 crore with current market value of Rs 40 crore belonging to the former General Manager of the Karnataka Bhovi Development Corporation (KBDC) B. K. Nagarajappa and the then Managing Director of KBDC R Leelavathy in connection with the Bhovi Corporation scam, the official statement said on Monday.
The release stated that the ED, Bengaluru Zonal Office has provisionally attached various immovable properties worth approximately Rs 26.27 crore, with current market value of Rs 40 crore belonging to Nagarajappa, Leelavathy and other accused, under the provisions of Prevention of Money Laundering Act (PMLA), 2002, in a case related to misappropriation of funds from Karnataka Bhovi Development Corporation (KBDC).
ED investigation revealed that Nagarajappa, the then General Manager, KBDC and Leelvathy, the then Managing Director, KBDC in connivance with middlemen and their associates, have misappropriated the funds from KBDC by sanctioning the loans/ subsidies/ financial assistance to the bank accounts of more than 750 fake beneficiaries, which were fraudulently opened by them, the ED said.
Later, the amounts so sanctioned from KBDC were diverted to the bank accounts of various entities, viz. Adithya Enterprises, Somanatheswara Enterprises, New Dreams Enterprises, Harntiha Creations, and Annika Enterprises, controlled by Nagarajappa and others, which was used in the purchase of properties, making payments to middlemen, and further diverted to bank accounts of individuals and various other entities, the ED statement said.
The money misappropriated from KBDC was mainly used to maintain their luxurious lifestyle and to acquire immovable and movable properties in their name, in the name of their family members, the statement said.
Earlier, the then General Manager of KBDC Nagarajappa and the then Managing Director of KBDC Leelavathy were arrested under Section 19 of PMLA 2002 by the ED on April 5, 2025 and April 12, 2025, respectively and are currently under judicial custody.
The ED said that further investigation is in progress.
The Bhovi Development Corporation scam, occurred during the previous BJP government allegedly took place in 2021–22, involved misappropriating large sums intended for loans under a job scheme for Bhovi community members.
(IANS)
