The Enforcement Directorate (ED) has arrested Dandamudi Venkateswara Rao — widely known as D.V. Rao — the promoter of the Sravanthi Group, in a money‑laundering probe that the agency says involves alleged proceeds of approximately ₹284 crore; two other persons were arrested alongside him and remanded to ED custody by a special court.
What the ED says investigators found
- The money‑laundering probe began after an FIR in Gurugram and a parallel investigation under the Prevention of Money Laundering Act (PMLA) identified multiple alleged irregularities linked to companies controlled by Rao, including DJW Electric Power Projects Pvt Ltd and Sravanthi Energy Pvt Ltd (SEPL).
- The ED says the investigation uncovered alleged misuse of RTGS instructions and diversion of loan repayments: loans totalling around ₹58 crore were identified in the DJW matter, while the overall laundering network grew into alleged proceeds of about ₹284 crore.
- In the SEPL strand, the agency alleges monthly “consultancy fees” of roughly ₹75 lakh were paid to a shell entity registered in the name of Rao’s father‑in‑law, resulting in a diversion of roughly ₹89.36 crore.
- Investigators also allege SEPL booked bogus purchases worth about ₹139 crore through fabricated invoices created by more than 100 benami/shell companies despite no actual supply of goods or services, with significant cash flows reportedly received by Rao and family members.
- The ED’s press release states that proceeds of crime identified against Rao and his family in the SEPL matter total approximately ₹228 crore, and that these transactions contributed to wider loan defaults and one‑time settlements involving banks.
Arrests, custody and procedural steps
- According to the ED, two directors — D.V. Rao and D. Shanthi Kiran — and Rao’s brother D. Avanindra Kumar were arrested and remanded to ED custody by the special court until May 12, 2026.
- Media reports note that the ED executed searches at multiple premises and expanded the probe after identifying transactions routed through numerous shell entities, with ongoing steps to trace the flow of funds and identify benami assets.
Alleged mechanics of the fraud (ED’s allegations)
- The ED says the scheme involved obtaining loans through misrepresentation and then diverting repayments and company funds via shell entities and false RTGS details, effectively masking the true beneficiaries of the monies.
- SEPL is accused of recording fake purchases using fabricated invoices issued by many inactive firms to create the appearance of legitimate business expenses and to channel funds out of the company, according to the ED.
- The agency has linked these practices to large non‑performing assets and subsequent one‑time settlements with banks that together produced substantial losses to the banking system, which media coverage has put in the range of hundreds of crores.timesofindia.
Responses and public statements
- The ED’s official press release summarises the probe’s findings and lists the arrests and remand orders; it frames the actions as part of a wider effort to curb laundering through shell entities and fabricated transactions.
- Local and national news outlets reporting on the ED release have reproduced the agency’s allegations and added details from court hearings and search operations, while noting that the matter remains under investigation and that legal processes are ongoing.
Legal context and next steps
- The case is being investigated under the PMLA framework, which allows the ED to attach and confiscate proceeds of crime and to pursue prosecution once the investigative record is complete; the arrested individuals have been placed in ED custody for further questioning and interrogation.
- Investigators will likely continue financial forensics, call banking and transaction records, trace flow of funds through the identified shell entities, and move to identify and provisionally attach properties and bank balances deemed to be proceeds of crime.
Implications for lenders and corporate compliance
- The ED’s allegations highlight common vulnerabilities exploited in alleged large‑scale diversion schemes: use of shell companies, falsified invoices, manipulation of RTGS beneficiary details, and apparent collusion that can convert legitimate bank credit into concealed cash flows, which can then degrade asset quality at lenders and raise systemic credit‑risk concerns.
- The matter underscores the need for robust lender due diligence, invoice matching, beneficial‑ownership verification and transaction monitoring to detect suspicious payment patterns and prevent diversion through benami arrangements.
What sources say and reporting notes
- The ED press release is the primary source of the agency’s claims and arrest details.
- Major national outlets covering the case reiterate the agency’s allegations and provide additional context from the FIR, searches, and earlier ED actions against the Sravanthi Group across different years.
- Journalists and legal observers caution that the allegations are subject to verification through court and investigative processes, and that arrested persons retain legal rights to challenge the ED’s claims before competent courts.