 | | squanderer: P B Mahishi | Karnataka’s topmost bureaucrat could have gone to jail for investing public money in a private finance company, but his friends in government have quietly closed the case.
P B Mahishi, chief secretary, was in the dock for violating rules and squandering away Rs 1.67 crore, and was in line for severe punishment till last month, but the department of personnel administration and reforms is playing guardian angel.
In the past
Mahishi was commissioner of Karnataka Housing Board in 1996, when it invested Rs 1.67 crore in an unknown firm called Jwalamalini Devi Financiers Pvt Ltd.
Rules say government money can only be deposited in the Reserve Bank of India or a nationalised bank.
But Muniratnappa, then finance controller of KHB, deposited the money in Jwalamalini Devi, a private company, on Mahishi’s orders.
All in the family
An inquiry later found that Muniratnappa’s sister Padmalatha owned the company, and KHB joint director Prasannaiah’s wife was her partner.
Sources say close relatives of Mahishi were stakeholders in Jwalamalini Devi. The KHB had invested the money as a fixed deposit for five years.
When word got around and scandalised official circles, Jwalamalini Devi started paying back the deposit in February 1997.
Govinda, Govinda!
1996: Karnataka Housing Board violates rules to invest Rs 1.67 crore in private firm Jwalamalini Devi.
1997: As scandal breaks, the firm offers to return money. Its cheque bounces.
1999: Police register complaint.
2007: Public Accounts Committee recommends action against Mahishi.
2008: Govt closes file relating to filing of FIR against Mahishi.
 | | more: Jwalamalini Devi owed KHB (above) Rs 3.38 crore pic/satish b | Why was the file closed?
The company returned Rs 50 lakh, but its cheque for Rs 1.80 crore bounced, and that led to the irregularity being exposed.
Some KHB employees raised their voice and a complaint was registered against Mahishi and Muniratnappa at Ulsoorgate police station in 1998.
Eyewash inquiry
The department of personnel administration and reforms, popularly called DPAR, then conducted a namesake enquiry and let off the two officials after issuing a mild warning.
Jwalamalini Devi had to pay KHB Rs 3.38 crore (principal plus interest) by December 2006.
A shocked Public Accounts Committee (PAC) submitted a report recommending a fresh inquiry and legal action against Mahishi. It reprimanded the government for being lax in punishing officials who had frittered away people’s money.
It wondered why Muniratnappa’s property, running into crores, had not been attached. The report recommended quick action to recover the money with interest.
The PAC report was tabled in the Karnataka assembly in Feb 2007, but the government sat on it. Mahishi is known to be close to JD(S) boss Deve Gowda’s family, especially to his son Revanna.
Last month, the government mysteriously closed the file pertaining to the filing of an FIR against Mahishi.
‘What closure?’
When MiD DAY contacted Syed Zameer Pasha, secretary, DPAR, he said he was not aware of the closure. “I will check and get back to you,” he promised.
Mahishi blamed Muniratnappa for the scandal.
“I had permitted him to invest only Rs 4.5 lakh. But he deposited Rs 1.67 crore and it did not come to my notice then,” he told MiD DAY.
When the closure of the file was brought to his notice, Mahishi said, “Muniratnappa is capable of hushing up things. Only a thorough inquiry will expose the real culprits.”
He was lost for words when asked why the PAC had indicted him. | 
