Former BJP minister Maluru Krishnaiah Shetty convicted in Rs 7.17 crore bank fraud case

A special court here on Thursday convicted former Karnataka Minister and BJP leader Maluru Krishnaiah Shetty in a fraud case involving Rs 7.17 crore.

Judge Santosh Gajanana Bhat ruled that Shetty and three others had defrauded a private bank using forged documents. However, the quantum of punishment is yet to be announced.

The case, investigated by CBI, was based on a complaint lodged by the defrauded bank.

The court has found Shetty, along with co-accused Srinivas and Muniraju, guilty of multiple offenses, including criminal conspiracy and forgery.

The fraud dates back to 1993 when Shetty, through his firm Balaji Krupa Enterprises, promised housing board loans to employees of public sector enterprises. By creating fake documents in their names, he secured bank loans, of which Rs 3.53 crore remains unpaid.

The CBI investigation confirmed his involvement in the scam, leading to charges under Sections 120B (criminal conspiracy), 409 (criminal breach of trust), 419 (cheating by personation), 420 (cheating), 467 (forgery), and 471 (use of forged documents as genuine) of the IPC.

Shetty, a former MLA from Maluru, was once a close associate of ex-Karnataka Chief Minister BS Yediyurappa. As Muzrai Minister in the BJP government, he had gained attention for distributing Ganga water. He had previously spent 24 days in jail alongside Yediyurappa.

After leaving BJP to join the Congress, Shetty returned to BJP in 2017. In the 2023 Karnataka Assembly election, he sought a BJP ticket for the Gandhinagar constituency in Bengaluru, but was denied a nomination in favour of Saptagiri Gowda.

Claiming an internal agreement between the Congress and BJP led to his exclusion. Shetty contested as an independent but secured only 6,781 votes, losing the election.

With the court now holding him guilty in the bank fraud case, Shetty faces fresh legal troubles, awaiting sentencing in the coming days.