Bengaluru, January 9, 2026 – In a shocking revelation exposing deep-rooted financial malpractices in the city's education sector, the Central Crime Branch (CCB) of Bengaluru Police has arrested two staff members of Edify School in Electronic City for allegedly siphoning off nearly ₹4 crore in student fees over seven years. The scam, which involved diverting school revenues into personal accounts and forging documents, has left the institution's management reeling and raised serious questions about oversight in private educational trusts.
The fraud surfaced last week when Ashoka K.M., the owner and director of Edify School – operated under the Kamala Muniyappa Educational Trust since 2010 – lodged a formal complaint with the CCB. According to the FIR, the misappropriation began as early as 2017, with school fees collected from hundreds of students systematically redirected away from official accounts. Instead of being deposited into the trust's ledgers for operational expenses like salaries, infrastructure, and scholarships, the funds were allegedly funneled into the personal bank accounts of the accused and their relatives for lavish personal expenditures.
Investigators allege a sophisticated scheme of manipulation: false entries were made in receipt books to underreport fee collections, while actual payments were pocketed. Account books were arbitrarily maintained without proper audits – a chief accounts officer and external auditor existed only on paper – and documents were forged to suppress evidence of the diversions. The total haul is estimated at ₹4 crore, affecting the school's financial stability and potentially depriving students of essential resources.
Five individuals have been named in the FIR registered under Sections 316 (criminal breach of trust), 318 (cheating), and 61 (criminal conspiracy) of the Bharatiya Nyaya Sanhita (BNS). The prime accused is Sagar H.N., the school's chief accountant, who is said to have orchestrated the operation. His accomplices include Murali, Mohan, Manoj, and Kishore – roles spanning accounting, transport in-charge, and other administrative positions within the school and trust. "The accused exploited their positions of trust to bleed the institution dry, creating a web of false records that went undetected for years," a senior CCB officer involved in the probe told reporters, speaking on condition of anonymity.
In a swift crackdown, CCB sleuths arrested Sagar and Manoj late Wednesday from their residences in Electronic City Phase II, following raids that uncovered digital trails of suspicious transactions and seized laptops, mobile phones, and financial ledgers. The duo was produced before a magistrate on Thursday and remanded in judicial custody for 14 days, with police seeking further interrogation time. "Interrogations have yielded crucial leads, including bank statements linking the diverted funds to luxury purchases and family investments," the officer added. A manhunt is underway for the remaining trio – Murali, Mohan, and Kishore – who are reportedly absconding, with non-bailable warrants issued and alerts circulated to neighboring states.
Edify School, a prominent CBSE-affiliated institution catering to over 1,500 students from kindergarten to Class 12, has temporarily halted admissions amid the uproar. Parents, already burdened by rising education costs in Bengaluru's competitive landscape, expressed fury over the betrayal. "We pay hefty fees trusting the school would use it for our children's future, not for some accountant's shopping spree," fumed Priya Sharma, a parent whose daughter is in Class 8, during a gathering outside the school gates Friday morning. The trust's management has promised full refunds to affected families and an independent audit, but skepticism lingers.
This scandal comes at a precarious time for Karnataka's private education sector, already under scrutiny for opaque fee structures and regulatory lapses. Last month, separate FIRs were filed against Euro School in Sarjapur for misleading parents on admission fees, and a state-wide probe into unauthorized collections is gaining momentum. Education activists have called for stricter oversight by the Department of School Education and Literacy, pointing to the Kamala Muniyappa Trust's failure to submit audited accounts as mandated under the Karnataka Education Act.
CCB officials have expanded the investigation to trace the money trail, including potential benami properties acquired with the pilfered funds. "We suspect accomplices beyond the school premises, possibly including external auditors or bankers who turned a blind eye," the officer revealed, hinting at a possible escalation if links to larger networks emerge. The probe team, led by Deputy Superintendent of Police (DSP) Rajesh Kumar, anticipates wrapping up preliminary inquiries within a week, with chargesheets expected by mid-February.
As the net tightens, the Edify School episode serves as a stark reminder of the vulnerabilities in India's booming private schooling ecosystem, where trust is the currency and betrayal the costliest fraud. For now, the classrooms of Electronic City remain a shadow of their vibrant self, with parents and pupils awaiting not just justice, but reassurance that education remains untainted by greed.
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