The ED initiated its investigation based on a First Information Report (FIR) registered by the Karnataka Lokayukta Police under various sections of the Indian Penal Code and the Prevention of Corruption Act against Siddaramaiah and associated individuals.
Allegations suggest that Siddaramaiah leveraged his political influence to secure compensation of 14 sites in his wife BM Parvathi's name in exchange for 3 acres and 16 guntas of land acquired by MUDA. The original acquisition cost of the land was ₹324,700, while the compensation, in the form of 14 sites in a prime locality, is estimated to be worth approximately ₹56 crore.
The ED's investigation revealed that former MUDA commissioner DB Natesh played a pivotal role in the illegal allotment of compensation sites to BM Parvathi. Further searches indicated that numerous sites, beyond the 14 allotted to Parvathi, were illicitly allocated by MUDA as compensation to real estate businessmen. These individuals reportedly sold the sites at substantial profits, generating significant amounts of unaccounted cash. The profits were then laundered and presented as legitimate income.
The ED uncovered that sites were allotted in the names of benami or dummy individuals linked to influential persons and real estate developers. Incriminating evidence pertaining to payments of illegal gratification to the then MUDA chairman and commissioner, in forms such as immovable property, MUDA sites, and cash, was recovered. The illicit gains were further laundered to appear as legitimate earnings.
The investigation also revealed that funds were channeled through a cooperative society for the purchase of properties and luxury vehicles in the names of relatives of GT Dinesh Kumar, a former MUDA commissioner.
In response to the allegations, BM Parvathi has returned the 14 housing sites allotted to her by MUDA. Chief Minister Siddaramaiah has denied any wrongdoing, attributing the accusations to political maneuvers by opposition parties. He questioned the basis for the Prevention of Money Laundering Act case against him, stating, "It is difficult to understand since there is no exchange of money involved."