ED Arrests Three in ₹512 Crore DJW-SEPL Loan Fraud and Money Laundering Case

The Enforcement Directorate (ED) has arrested three individuals—Dandamudi Venkateswara Rao, D. Shanthi Kiran, and D. Avanindra Kumar—in connection with a money laundering case involving alleged fraud of ₹512 crore through DJW Electric Power Projects Private Limited and Sravanthi Energy Private Limited (SEPL). The arrests follow an investigation into loan siphoning through shell entities, with the ED securing custody of the accused until May 12.

The ED alleges that ₹284 crore was laundered through DJW by misusing the RTGS system, where repayment mandates fraudulently redirected funds to Kolkata-based shell companies including Nexus International and Gabel Trading Co. Separately, SEPL, also controlled by D.V. Rao, allegedly diverted ₹89.36 crore via fake consultancy fees to Verset Technologies Pvt. Ltd., a non-operational entity, and routed over ₹139 crore through fictitious invoices from more than 100 shell firms, with proceeds returned in cash to Rao and family members. The total identified proceeds of crime in the SEPL case amount to ₹228 crore, the agency said.

The ED said D.V. Rao’s default led to SEPL’s loan account being classified as a non-performing asset, forcing banks into a one-time settlement that caused losses exceeding ₹1,500 crore. Several PSU banks hold minority stakes in the company. Earlier searches yielded gold and diamond jewellery worth ₹5 crore and luxury vehicles, while assets worth ₹24 crore have been provisionally attached.

The ED is continuing its investigation under the Prevention of Money Laundering Act, with plans to expand scrutiny of fund flows and shell networks. The agency will present the accused before the special PMLA court for further custody and case proceedings.