Karnataka jobs scam: ED says middleman paid Rs 1.3 crore to IAS officer for questions

ED has found that the middleman transferred funds to IAS officer Gangwar even in 2025.(Express photo/Special arrangement).

The Enforcement Directorate (ED) said Monday that a middleman, arrested in connection with the alleged irregularities in the recruitment of veterinarians by the Karnataka Public Service Commission (KPSC), paid Rs 1.3 crore to the former controller of exams, IAS officer Gyanendra Kumar Gangwar, and also bought jewellery to facilitate exam paper leaks.

ED cited the middleman Basavaraj Kannale’s statements made during questioning to obtain custody of Gangwar in its own probe under the Prevention of Money Laundering Act (PMLA), 2002.

The Central agency arrested Gangwar and Kannale last week and obtained body warrants from a Criminal Investigation Department (CID) court to produce Kannale before a special judge for PMLA cases in Bengaluru Monday.

However, when the Karnataka CID took Kannale into further custody for two days on September 19, the middleman was not produced.

ED took Gangwar, whom the CID arrested on August 29, into six-day custody as part of its investigation into the money angle in the KPSC recruitment fraud.

Payments to IAS officer Gangwar

ED told the special court that during questioning, Kannale claimed he paid Rs 1.30 crore in cash to Gangwar apart from sponsoring jewellery purchases.

While ED said Gangwar bought a diamond necklace worth Rs 23 lakh from a prominent jewellery showroom in Bengaluru through funds funnelled by Kannale, the Karnataka CID said during his bail hearing that the IAS officer also bought a gold necklace worth over Rs 28 lakh through Kannale.

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The Karnataka CID indicated in court last week that it had recovered the jewellery from one of Gangwar’s friends.

According to sources familiar with the PMLA probe, the ED is examining whether proceeds of crime were generated through other KPSC exams conducted during Gangwar’s two-year tenure from 2024 to March 2026, as the controller of exams, since the middleman

“handled funds for the IAS officer for a long time and not just recently “.

ED has found that Kannale transferred funds to Gangwar even in 2025, sources said.

What the probe has found

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The probe by CID and ED has so far revealed that the middleman received Rs 30 lakh to Rs 40 lakh to provide access to the entrance exam questions.

Kannale is alleged to have collected around Rs 1.5 crore in advance bribes from candidates seeking selection as veterinary officers in the state services, with part of the bribe in cash and around Rs 80 lakh traced to bank transfers.

ED said its probe shows that Gangwar provided the entrance exam question paper, along with the answers, to Kannale on a pen drive on January 7 when he visited the officer at his house. Aspirants, who allegedly paid and stayed at Airbnb villas, were given the question papers ahead of the main exam on January 9.

Sources said the role of KPSC chairman Sahukar Shivashankarappa and other members in laundering funds obtained through fraudulent practices at the KPSC is also under scrutiny.

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Dr S Manjunath, an unsuccessful candidate, filed a First Information Report on July 24, 2026, alleging that 29 aspirants with poor academic records scored above 450 marks out of 600 and were selected as veterinary officers.

As many as 1,400 candidates wrote the KPSC entrance exam held in January for 400 posts of veterinary doctors in the government services, and 329 candidates were selected.