A special court here on Monday remanded former Minister B Nagendra to 14 days judicial custody in connection with a money laundering probe linked to alleged irregularities in the Karnataka Maharshi Valmiki Scheduled Tribes Development Corporation Limited.

The Ballari Rural Congress MLA was produced before the court as his Enforcement Directorate (ED) custody ended today. The federal probe agency did not seek further custody.

The ED arrested Nagendra on July 12 in connection with the case after questioning him.

Following allegations against him in connection with the scam, Nagendra, who was Scheduled Tribes Welfare Minister, tendered his resignation on June 6.

Ahead of his arrest, the ED had carried out searches earlier this month at several places, including at the premises of Nagendra, and ruling Congress MLA Basanagouda Daddal, who is Chairman of the state-run Corporation.

The agency covered around 20 locations in Karnataka, Andhra Pradesh, Telangana and Maharashtra as part of a case registered under the Prevention of Money Laundering Act (PMLA).

The ED last week alleged that a "substantial" amount of funds "misappropriated" from the Corporation were used to procure liquor during the recently-concluded Lok Sabha elections apart from some highly-priced vehicles.

Probe found, the agency claimed, that "about Rs 90 crore were diverted to 18 fake accounts in Andhra Pradesh and Telangana (from the funds of the Valmiki corporation). The diverted funds were then layered through fake and shell accounts, with cash and bullion dispersed among the accused.

The state government has also constituted a Special Investigation Team headed by Manish Kharbikar, Additional Director General of Police, Economic Offences, at the Criminal Investigation Department (CID), to conduct a probe.

SIT had questioned Nagendra and Daddal earlier this month.

Mumbai-headquartered Union Bank of India had also filed a complaint with the CBI in connection with embezzlement of money belonging to the Corporation involving its MG Road branch, following which the premier investigation agency had initiated a probe.

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