ED arrests Sravanthi Group promoter DV Rao in Rs 284 cr PMLA case

The ED arrested Sravanthi Group promoter DV Rao and two others in a ₹284-crore money laundering case involving shell firms, fake invoices and loan diversion.

Hyderabad: Directorate of Enforcement has arrested Dandamudi Venkateswara Rao, popularly known as DV Rao, along with two others in connection with an alleged Rs 284-crore money laundering case involving fraudulent loans, shell companies and fake transactions.

In a statement issued on Saturday, May 9, the ED said searches conducted as part of the investigation led to the seizure of gold and diamond jewellery worth around Rs 5 crore belonging to DV Rao and his family members.

According to the agency, DV Rao had repeatedly ignored summons issued during the investigation and was absconding, prompting a court to issue a non-bailable warrant against him.

The ED alleged that his brother, Avaneendra Kumar, played a key role in obstructing the investigation and helped DV Rao hide at his residence in Hyderabad. Based on evidence gathered during the probe, all three accused were arrested.

A court later remanded the accused to ED custody till May 12.

Fake purchases worth Rs 139 cr detected

The money laundering investigation began after an FIR registered in Gurugram alleged that DJW Electric Power Projects Private Limited, controlled by DV Rao, had fraudulently obtained massive loans from several entities.

So far, investigators have identified loans amounting to ₹58 crore. Though the company’s accounting records showed that the loans were being repaid to genuine lenders, the ED alleged that the RTGS payment system was misused.

Investigators found that while the names of actual lenders were mentioned in RTGS forms, the bank account details belonged to shell companies based in Kolkata. The agency suspects that loan repayment funds were diverted to these shell entities.

The probe subsequently expanded to Sravanthi Energy Private Limited (SEPL), another company allegedly controlled by DV Rao. The ED alleged that SEPL paid Rs 75 lakh every month as “consultancy fees” to a shell company linked to one of DV Rao’s relatives, leading to the diversion of Rs 89.36 crore.

The agency further found that SEPL allegedly recorded fake purchases worth Rs 139 crore through fabricated invoices generated by more than 100 benami companies, despite no actual supply of goods taking place.

The ED suspects that these payments were later returned in cash to DV Rao and his family members.

According to investigators, DV Rao and his family derived proceeds of crime amounting to Rs 228 crore through SEPL. The ED also alleged that SEPL eventually became a non-performing asset after defaulting on large bank loans, forcing banks to opt for one-time settlements.

The alleged fraud is said to have caused losses of nearly Rs 1,500 crore to the banking system.