The Enforcement Directorate (ED) on Thursday approached the Karnataka High Court challenging the special court's order granting bail to former Karnataka minister B Nagendra, who was arrested on July 12 in connection with the Valmiki Corporation scam case.

Justice M Nagaprasanna issued notice to Nagendra and asked him to file a reply by November 15, the next date of hearing.

Additional Solicitor General SV Raju, who appeared for the ED, told the Court that the special court had made "many erroneous" assumptions while granting bail to Nagendra.

The Court, however, said it wanted to hear both parties before passing any interim orders.

On October 14, a special court in Bengaluru had granted bail to Nagendra, who has been booked on allegations of having misused funds from the Karnataka Maharshi Valmiki Scheduled Tribes Development Corporation.

The ED had filed a chargesheet earlier this month identifying Nagendra as the mastermind behind the scam. However, a Special Investigation Team (SIT) constituted by the Karnataka government to probe the scam has not named him in its first information report (FIR).

The alleged scam came to light in May this year after the accounts superintendent of the Karnataka Maharshi Valmiki Scheduled Tribes Development Corporation, Chandrashekhar, died by suicide at his residence. Chandrashekhar left behind a note alleging misappropriation of the welfare funds.

Soon after, the Karnataka government constituted an SIT to probe the allegations, while the ED began a separate probe.

As per the ED, around ₹90 crore was illegally transferred from the Valmiki Corporation’s bank account to several unauthorised accounts.