A scam is going on in Karnataka in the name of donating Corporate Social Responsibility (CSR) funds. Karnataka Deputy Chief Minister D K Shivakumar has recently flagged this “illegal” practice among corporates.

“The state’s corporates are making CSR donations to private nonprofits in other states via cheques. Of the donated amount, they’re taking back 50% in cash. This is illegal. The state’s (CSR) fund is being misused because of this”, Shivakumar made this allegation at a review meeting with all deputy commissioners and Zilla Panchayat chief executives.

The Deputy CM reminded that it is the responsibility of deputy commissioners and Zilla Panchayat to ensure that CSR funds are used for the development of the state’s schools. He also clarified that the Karnataka government does not expect corporates to give CSR funds directly to the state.

The state government has also appointed IAS officers Gunjan Krishna and Khushboo Goel Chowdhary to mobilise CSR funds for the construction of Karnataka Public Schools. Krishna will be the coordinating officer while Chowdhary is named as Chief Executive Officer for this purpose.

What is a CSR scam?

A “CSR scam” refers to a fraudulent scheme that exploits the concept of Corporate Social Responsibility (CSR) to deceive individuals or groups into investing money or otherwise participating in a fraudulent activity. These scams often involve false promises of discounted goods or services, or investments that will benefit from CSR funds, but the promises are ultimately not fulfilled and the money is misappropriated.

Kerala CSR scam

In a recent case in Kerala, people were allegedly duped by promises of two-wheelers, laptops, and sewing machines at half the price, claiming they were part of a CSR scheme. According to the police, the alleged scam involved cheating and misappropriation of money by offering laptops, two-wheelers, and home appliances at half price claiming that the discount was part of the CSR activities of various NGOs and charitable organisations.

The ED raided 12 locations, including the house of K.N. Ananda Kumar, chairman of the National NGO Confederation, one of the firms set up by key accused Ananthu Krishnan to pull off the alleged scam, and the office of the Sri Sathya Sai Orphanage Trust, of which Mr. Kumar is the founder and executive director, in Thiruvananthapuram.