IAS officer Rohini Sindhuri was "shunted out" as the secretary of the Karnataka Building and Other Construction Workers Welfare Board as she resisted attempts at possible misuse funds meant for upliftment of labourers, according to sources.

Sindhuri, 35, was transferred by the state government on September 20. Labour Commissioner K G Shantaram has been given concurrent charge of the Board, while Sindhuri has not been given a new posting. Chief Minister B S Yediyurappa holds the labour portfolio.

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The Board has a corpus of about Rs 8,000 crore, which is mostly through labour cess of 1% that is levied on all construction projects — government or private. Sindhuri was taking steps to streamline the Board’s expenditure, what with only about Rs 800 crore spent in the last eight years.

But according to sources, Sindhuri was under pressure to spend these funds in ways that could have led to pilferage. These claims were corroborated by a senior IAS officer who said was aware of the reasons behind Sindhuri's transfer.

For instance, Sindhuri was asked by one senior IAS officer to award various works of the Board to the state-run Karnataka State Electronics Development Corporation Ltd (Keonics) without following the tendering process. Sindhuri insisted on choosing service providers from the open market through a tendering process, given that Keonics was found to have an uninspiring track record in implementation of projects, sources said.

One such project that Sindhuri was expected to hand over to Keonics was a six-digit, 24/7 helpline dedicated to labour welfare. On August 30, Labour Secretary P Manivannan urged Sindhuri to expedite the helpline project.

Sindhuri was also under pressure to divert a portion of the Board’s funds towards flood relief. Sources said Sindhuri was initially asked to part with Rs 3,000 crore — and then Rs 1,000 crore — to distribute food packets, furniture and lighting in flood-hit areas.

Internally, Sindhuri argued that the Supreme Court monitored the use of the cess money and that there were clear guidelines on how it should be spent. Sindhuri was worried that without a proper system in place, money given to flood relief could be misused.

Sindhuri’s transfer came at a time when the Board was all set to launch mobile creches for children of construction workers across 100 locations in Bengaluru.

Chief Secretary T M Vijay Bhaskar said the government was aware of the concerns expressed over Sindhuri's transfer.

Earlier, the 2009-batch officer, as Hassan deputy commissioner, locked horns with the then ministers A Manju and H D Revanna because she reportedly did not toe their line.