Bengaluru: The Enforcement Directorate (ED) has alleged that middleman Basavaraj Kannale paid ₹1.30 crore in cash to suspended Gyanendra Kumar Gangwar, a 2016-batch IAS officer of the Karnataka cadre, in connection with the alleged leakage of the Karnataka Public Service Commission (KPSC) Veterinary Officer recruitment examination paper.
The allegation was made before a Bengaluru special court as the ED sought custody of Gangwar in its money-laundering investigation under the Prevention of Money Laundering Act (PMLA). The court subsequently remanded Gangwar to six days of ED custody, till September 26.
Gangwar, who served as KPSC Controller of Examinations from 2024 to March 2026, had earlier been arrested by the Karnataka CID in the case. Kannale, identified by investigators as an alleged middleman, was also arrested.
ED Traces Cash and Jewellery Trail
According to the ED’s remand application, Kannale allegedly collected around ₹1.50 crore in advance payments from candidates, of which ₹1.30 crore was allegedly handed over to Gangwar.
The agency further alleged that jewellery worth ₹23 lakh was purchased using funds linked to the alleged recruitment racket.
The CID had separately told a Bengaluru court that funds allegedly collected from candidates were used to purchase gold and diamond jewellery worth about ₹52 lakh for a woman associated with Gangwar. Investigators cited bank transactions, CCTV footage and call records while presenting their findings.
Question Paper Allegedly Passed Through Pen Drive
The ED alleged that Gangwar provided the Veterinary Officer recruitment examination question paper, along with answers, to Kannale through an HP pen drive on January 7, 2026, two days before the examination.
Investigators have alleged that candidates who had paid money were subsequently given access to the leaked material before the examination. The CID had earlier reported that some candidates were taken to a resort in Devanahalli, where they were allegedly coached using the leaked questions.
The recruitment examination was conducted for 400 Veterinary Officer posts. The investigation has focused on allegations including question-paper leakage, manipulation of examination records and payments made by candidates seeking selection.
Court Orders Fresh SIT Probe
In a separate development on September 21, the Karnataka High Court constituted a Special Investigation Team (SIT) to conduct a fresh investigation into alleged irregularities in KPSC recruitment, including the Veterinary Officer examination.
The SIT will be headed by Alok Kumar, Director General of Police (Prisons and Correctional Services). The court directed the team to complete the investigation within 100 days and submit progress reports every 30 days.
The High Court also directed the transfer of relevant evidence from the CID and jurisdictional police to the SIT. The court declined to hand over the investigation to the CBI.
Investigation Expands Beyond Veterinary Recruitment
The ED is examining the alleged flow of funds and the possible involvement of other individuals in the recruitment process. The agency has also been investigating whether alleged proceeds of crime were generated through other KPSC examinations conducted during Gangwar’s tenure as Controller of Examinations.
The suspended KPSC chairman Sahukar S Shivashankarappa has also come under investigation over alleged links with Kannale. A Karnataka High Court order dated September 7 noted that investigators had placed material before the court showing contact between the chairman, Gangwar, Kannale and other intermediaries.
The court, however, was dealing with a bail petition and its observations concern material available at that stage of the investigation.
The allegations remain subject to investigation and judicial proceedings.
