Former Chandigarh Smart City Limited (CSCL) Chief Financial Officer Nalini Malik has approached a CBI court seeking permission to become a government witness in the alleged ₹116 crore Chandigarh Smart City scam linked to fake fixed deposit receipts and suspected diversion of public funds. Malik reportedly offered to disclose details about the alleged involvement of officials and banking personnel connected to the case.
The case relates to an alleged financial fraud involving fake fixed deposit receipts (FDRs) created in the name of the Municipal Corporation, Chandigarh, using funds linked to the Chandigarh Smart City project and IDFC First Bank accounts. The investigation was initially handled by Chandigarh Police’s Economic Offences Wing before being transferred to the Central Bureau of Investigation (CBI).
Nalini Malik Seeks to Become Government Witness
According to court proceedings, Nalini Malik submitted an application before the CBI court expressing willingness to cooperate with investigators and reveal details about officials, bank employees, and other individuals allegedly connected to the scam.
Investigators have alleged that forged FDRs worth approximately ₹116.84 crore were created in favour of the Municipal Commissioner, Chandigarh. Authorities suspect the alleged fraud involved coordination between bank officials, Smart City employees, and intermediaries handling financial transactions.
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Malik was arrested earlier in April 2026 after her name surfaced during the probe into alleged embezzlement of Smart City funds deposited with IDFC First Bank. Police had earlier claimed she received cash linked to siphoned government funds and played a role in facilitating fraudulent financial documentation.
Probe Examines Fake FDRs and Shell Company Transactions
Investigators alleged that former IDFC First Bank branch manager Ribhav Rishi, along with other accused persons, created shell entities and fabricated investment records to siphon public money from official accounts.
According to investigators, the alleged scam came to light after Chandigarh Municipal Corporation officials attempted to encash FDRs worth ₹116 crore, only to discover that the deposits allegedly did not exist in the bank’s official records. Suspicious banking transactions and discrepancies in account statements reportedly triggered the criminal investigation.
Authorities are also examining layered financial transfers, shell company operations, and alleged conversion of diverted funds into cash and gold through intermediaries and jewellers. Earlier investigations suggested that nearly ₹50 crore may have been routed to jewellery firms through shell companies linked to the accused network.
Multiple Officials and Financial Operators Under Scanner
The broader investigation has already resulted in several arrests, including bank employees, financial handlers, businessmen, and Smart City-linked officials. Among those arrested are former bank officials, shell company operators, and individuals allegedly involved in handling fake investment instruments.
Investigators are also examining the possible involvement of additional officials associated with Chandigarh Smart City Limited and related government entities. Financial records, bank transactions, call details, and digital evidence are currently under forensic scrutiny.
The CBI is expected to respond to Malik’s request before the court as the investigation progresses further. Authorities are continuing efforts to trace the complete money trail and identify all beneficiaries connected to the alleged fraud network.
Smart City Fund Scam Raises Governance Concerns
The alleged fraud has raised concerns over financial oversight mechanisms within government-backed Smart City projects and public fund management systems. Investigators are examining whether internal control failures, fabricated banking instruments, and collusion between officials and external entities enabled the alleged diversion of funds.
The case has also intensified scrutiny over the use of shell companies and fake financial documentation in public-sector fraud investigations across India. Authorities are expected to continue coordinating with banking institutions and forensic experts as the probe expands.
