HYDERABAD: The Directorate of Enforcement (ED), Hyderabad Zonal Office, has filed a supplementary prosecution complaint under the Prevention of Money Laundering Act (PMLA), 2002 against M/s Sahiti Dunphatec Constructions India Pvt. Ltd. (SIBIPL), its former director and head of sales and marketing B. Lakshmi Narayan, and Sandhu Purnachandra Rao. The Hon’ble MSJ Court, Hyderabad took cognizance of the matter on 5 January 2026.
The investigation was initiated based on FIRs registered by Telangana Police against SIBIPL, B. Lakshmi Narayan, and others. The complaints alleged that the company had advertised premium residential gated community projects with “pre-launch offers” and collected substantial amounts from prospective buyers. However, the company failed to deliver the promised flats and did not refund the amounts, causing financial loss to investors.
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Subsequent complaints from investors in various projects undertaken by SIBIPL and its associated group companies led to the registration of additional FIRs. Investigations revealed that over 700 homebuyers were defrauded, and approximately ₹360 crore was collected through misrepresentation and fraudulent inducements.
Regulatory violations and illicit financial transactions
ED’s investigation revealed that SIBIPL did not possess the required RERA/HMDA approvals, and no escrow accounts were maintained for the projects. Investor funds were deposited into multiple bank accounts and also collected in cash. Allegedly, through the guise of inventory sales, the company mobilised approximately ₹800 crore without regulatory approvals, misleading the public.
In particular, the Sarvani Elite Project saw ₹216.91 crore collected in cash from buyers under the pretense of inventory sales.
The probe further established that funds obtained through these fraudulent activities were diverted to related and unrelated entities/persons via fictitious banking transactions with no real business purpose. A significant portion of the proceeds was also misappropriated in cash. B. Lakshmi Narayan and family members allegedly transferred some of the proceeds to foreign bank accounts.
Role of Sandhu Purnachandra Rao
Sandhu Purnachandra Rao was reportedly involved in misappropriating approximately ₹126 crore from SIBIPL, including ₹50 crore in cash. Forensic audits confirmed these findings. Subsequently, he reportedly reached an agreement with B. Lakshmi Narayan and transferred 21 immovable properties to beneficial ownership in the name of the promoter and associates. Rao also purchased properties for his family members and entities using proceeds of the crime.
Raids, seizure and attachment of assets
Earlier, the ED conducted searches at multiple premises, seizing incriminating material, digital devices, and several bank accounts. During the PMLA investigation, assets worth approximately ₹169.15 crore, comprising movable and immovable properties, were provisionally attached.
Arrests and judicial custody
B. Lakshmi Narayan and Sandhu Purnachandra Rao were arrested on 29 September 2024 and 25 August 2025, respectively. Both are currently in judicial custody.
Ongoing investigation
The ED has confirmed that the investigation is ongoing, with a focus on tracing the flow of illicit funds, identifying additional persons involved, and locating other assets. Further attachment actions and prosecution may follow as the probe progresses.
