ED flags PWD bribes, overseas mining links after raids on Karnataka minister Jarkiholi

The Enforcement Directorate (ED) on Friday said it seized Rs 3.45 crore in cash and foreign currency during searches linked to Karnataka Public Works Department Minister Satish Jarkiholi, his family members and associates as part of a Foreign Exchange Management Act (FEMA) investigation into alleged undisclosed overseas investments and cross-border business dealings.

The searches, carried out on September 9 and 10, covered premises associated with the 64-year-old Congress leader in Gokak in Belagavi district and at Dollars Colony and Crescent Road in Bengaluru. The ED alleged that members of the Jarkiholi family had acquired stakes in several foreign entities and that its searches also uncovered material relating to alleged collection of bribes from PWD contractors.

Rs 3.3 crore cash, foreign currency seized

The ED said Rs 3.3 crore in alleged unaccounted cash was seized along with US dollars, euros and other foreign currency worth approximately Rs 15 lakh, taking the total seizure to around Rs 3.45 crore. The agency did not specify how much was recovered from each of the premises searched.

Besides Jarkiholi, searches covered properties linked to his daughter and Chikkodi MP Priyanka Jarkiholi, 29, his son Rahul Jarkiholi and his brother-in-law Y D Manjunath, an officer in the Karnataka Excise Department.

The agency also searched premises connected with Jarkiholi’s Officer on Special Duty and personal assistant Malagouda Patil and associates Raju Daragshetti, Vittal Parasannavar and Girish Sonwalka.

ED alleges investments in African mining firms

According to the ED, Priyanka Jarkiholi, Rahul Jarkiholi and the minister’s sister Mahadevi Manjunath, wife of Y D Manjunath, acquired shareholdings in foreign entities Eldorado Mining Resources in Congo and Nava Aurum Mining Limited in Zambia.

The agency further alleged that Satish Jarkiholi acquired nearly a 40 per cent stake in Magnitude Star SARL in Congo, a company engaged in gold mining. Documents concerning other foreign entities holding mining assets in Africa were also seized during the searches, it said.

Investigators alleged that substantial investments and expenses relating to an entity in Congo were made in cash through unauthorised channels. The FEMA investigation is examining whether the overseas investments and transactions complied with India’s foreign exchange regulations.

PWD contractor payments under scanner

The premises of Bharat Vanijya Eastern Private Limited (BVEPL) were also searched. The ED alleged that the private company made a substantial bribe payment in return for securing a PWD tender and that the money was subsequently used to acquire foreign assets.

The agency claimed its searches uncovered evidence of alleged irregularities in the Public Works Department and material, including digital devices, concerning purported collection of bribe money from contractors such as BVEPL.

It also said investigators recovered accounts relating to several “influential persons”, including accounts of an entity allegedly controlled and managed by Manjunath.

The allegations have not been adjudicated by a court, and the investigation remains underway.

Jarkiholi says he will provide documents

Jarkiholi, responding to the searches on Thursday, said he would cooperate with investigators and provide all documents sought by the ED. He, however, accused central investigative agencies of applying different standards while dealing with Opposition politicians and BJP leaders.

“We may have made some minor mistakes. I cannot say that everyone is 100 per cent correct,” Jarkiholi said, while alleging that agencies such as the CBI, ED and Income Tax Department were not pursuing people who had committed more serious violations with the same intensity.

Karnataka Chief Minister D K Shivakumar also rejected the allegations against his Cabinet colleague and described the searches as “nothing but politics”.

The ED, however, has maintained that the action is part of its FEMA investigation into alleged overseas shareholdings, foreign investments and transactions involving the minister’s family and associates. The documents and digital devices seized during the two-day operation are expected to be examined as the agency takes the investigation forward.