New Delhi/Hyderabad, May 9 (PTI) The ED on Saturday said its money laundering probe into Dandamudi Venkateswara Rao (D V Rao), promoter of Sravanthi Group, and his associates has uncovered alleged large-scale laundering worth approximately Rs 284 crore, and that three persons, among them Rao, have been arrested.

All three have been remanded to Enforcement Directorate custody by a competent court until May 12.

The ED said in a press release that its investigation originated from an FIR registered at a police station in Gurugram, wherein it was alleged that DJW Electric Power Projects Private Ltd, controlled by Rao, had fraudulently availed loans from various entities.

The ED investigation thus far revealed that the total loan amount involved in the fraud was approximately Rs 58 crore, the release said.

According to the ED, while the accounting records of DJW showed that loans were being repaid to the original lenders, the banking RTGS system was allegedly misused.

The ED said the RTGS mandate forms fraudulently mentioned the names of actual lenders but provided bank details of Kolkata-based shell entities.

Consequently, loan repayment funds were allegedly siphoned off to shell companies instead of being returned to legitimate lenders.

Further investigation under the Prevention of Money Laundering Act led to registration of another scheduled offence and a parallel money laundering probe involving Sravanthi Energy Private Limited (SEPL), also controlled by Rao.

The release claimed SEPL had been paying approximately Rs 75 lakh per month as “consultancy fee” to a shell entity that had no office or employees and was registered in the name of D V Rao’s father-in-law.

Through this arrangement, Rs 89.36 crore was allegedly diverted, it said.

Simultaneously, SEPL booked bogus purchases of over Rs 139 crore through fake invoices from more than 100 shell entities, without any actual supply of goods or services.

These payments were allegedly received back in cash by Rao and his family.

The total proceeds of crime identified against Rao and his family in the SEPL case are approximately Rs 228 crore, it claimed.

The ED investigation further revealed that D V Rao had earlier defaulted on large amounts to banks, which led SEPL to become a Non-Performing Asset (NPA), it said.

This, in turn, compelled banks to resort to a compulsory One-Time Settlement (OTS), resulting in an alleged loss of more than Rs 1500 crore to the banking system.

The ED alleged that while the company was under financial stress, Rao was systematically siphoning funds for personal enrichment.

It claimed he defrauded not only banks but also investors in the company. Several PSU banks hold minority shares in the company, it added.

During search operations, the ED said it seized gold and diamond jewellery valued at approximately Rs 5 crore and multiple luxury vehicles belonging to D V Rao and his family members.

Thereafter, the ED issued a provisional attachment order under the Prevention of Money Laundering Act (PMLA) against Sravanthi Energy Pvt Ltd and others.

Despite multiple summons, D V Rao remained absconding and did not cooperate with the investigation, it alleged.

His alleged non-cooperation led to the issuance of an open-ended non-bailable warrant against him by a court to ensure his presence before the investigating agency.

The ED further alleged that his brother, Dandamudi Avanindra Kumar (DA Kumar), played an active role in obstructing the investigation.

The evidence on record shows that Rao was hiding at DA Kumar’s residence in Hyderabad to evade ED proceedings, the release said.

Sravanthi Group, according to its website, offers end-to-end engineering solutions for the development of conventional and renewable energy-based power generation projects in India. The group was established in 2009 and is headquartered in Gurugram. PTI SJR SSK

Money laundering probe alleges diversion of loan repayments through shell entities and fake RTGS instructions in Sravanthi Group case. Money laundering allegations arose from an ED probe into the Sravanthi Group and entities controlled by D V Rao, including DJW Electric Power Projects Private Ltd and Sravanthi Energy Private Limited. The investigation alleged misuse of RTGS repayment instructions, diversion of loan repayments to shell entities, and routing of funds through fake lender details. The ED stated that the probe had identified proceeds of crime of about Rs 284 crore across the connected transactions, with a separate component of alleged loan fraud of about Rs 58 crore.