When Rs 95.78 crore was supposed to be credited from Chandigarh Smart City Limited (CSCL), only Rs 81.20 was found in Chandigarh Municipal Corporation’s (MC’s) account, the UT Police told the court on Thursday.

The statement made in the remand application of Chandigarh Police places former CFO (chief finance officer) Nalini Malik of the Smart City Project at the centre of the alleged financial fraud. Malik was produced before the court on Thursday evening, where police have argued that custodial interrogation of Malik is essential to uncover the full conspiracy, trace the siphoned funds, and identify other officials involved.

The court on Thursday granted four days of police remand to Malik against six days sought by the police.

As per the remand papers filed by Chandigarh Police, the CSCL was merged with the MC, Chandigarh, on March 28, 2025, and Malik was nominated as a member of the team responsible for handing over the relevant records of CSCL to the civic body. On the same day, a fresh account (99988877765) was opened in IDFC First Bank in the name of Municipal Corporation, Chandigarh. However, at the time of handing over/taking over the charge on March 28, 2025, only Rs 81.20 was found in the account, whereas Rs 95.78 crore was supposed to be credited into it from CSCL.

It is further alleged that Malik, in connivance with Anubhav Mishra, accountant in the MC office, Chandigarh, and other officials of Chandigarh Smart City Limited, Municipal Corporation Chandigarh, and bank officials of IDFC First Bank, managed to create 11 false and fabricated Fixed Deposit Receipts (FDRs) amounting to Rs 116.84 crore in favour of the Municipal Commissioner, Chandigarh.

It is further alleged that the former CFO of Smart City Project was well aware of all transactions credited from the CSCL’s IDFC First Bank account to various shell company accounts of co-accused persons. Further, the UT Police claimed that Malik had also received a sum of Rs 2 lakh from a shell company named Swastik Desh Project in her YES Bank account.

Also, police said that during the interrogation of Malik it was found that she, along with other officials of the MC had received more than Rs 50 crore in cash from the siphoned funds of CSCL. It is further alleged that approximately Rs 116 crore of CSCL and the civic body funds have been siphoned off by the accused persons.

As per the remand papers, in a disclosure, co-accused and former bank manager Rishav Rishi allegedly stated during interrogation that he had created fake and forged FDRs amounting to around Rs 116 crore with the involvement of municipal officials. His statement, as recorded in the remand papers, further claims that shell firms were created “with the connivance” of Malik and Narender Pal Sharma (chief executive manager of Smart City project) and Municipal Corporation officials.

The remand papers further quote that these shell entities included firms such as CAPCO Fintech, R S Traders, and Swastik Desh Project. The disclosure indicates that funds were allegedly diverted into these entities accounts and also withdrawn in cash.

Police have also pointed to the role of Anubhav Mishra, an outsourced accountant, who was handling key financial records during the transition of CSCL funds. The remand note states that Mishra has been missing since February 24 and has not been attending office, with his phone switched off.

Police further told the court that Nalini Malik was not only aware of the transactions but was allegedly a central figure in coordinating the financial movement during the closure of the Smart City project.