₹300 Crore Real Estate Scam: ED Arrests Jayathri Infrastructures MD in Chennai

Hyderabad: The Enforcement Directorate (ED) arrested Kakarla Srinivas, the Managing Director of Jayathri Infrastructures Private Limited, in an alleged ₹300 crore real estate fraud. The arrest took place in Chennai, and Srinivas was subsequently brought to Hyderabad for further legal proceedings.

The company had attracted numerous homebuyers with an enticing ‘pre-launch offer’ scheme. This scheme promised significant discounts and attractive terms to lure potential buyers. However, despite receiving substantial payments, the promised houses were never delivered, leaving hundreds of buyers cheated and financially devastated.

Srinivas had been evading authorities since the registration of the ED case. After months of tracking, he was finally apprehended in Chennai. The arrest has sent shockwaves through the real estate sector, with investigators cautioning homebuyers to be wary of overly promotional and misleading schemes.

Investigations revealed that Srinivas allegedly collected large sums of money from homebuyers by promising houses under an attractive ‘pre-launch offer’ scheme. Despite receiving the payments, the properties were never delivered, leading to the massive fraud. The ED's preliminary findings indicate that the scale of the fraud is estimated at around ₹300 crore. The agency is currently examining financial records and transactions to trace the money trail and identify any possible diversion of funds.

Srinivas will be produced before a competent court shortly. Further custodial interrogation may be sought to uncover the full extent of the scam and to identify other individuals involved in the fraud.

Kakarla Srinivas reportedly founded Jayathri Group in February 2021 along with 19 other directors. Their first major project, Hilton Jaya Diamond, was launched with significant fanfare. However, Srinivas and a few others have a history of similar scams, with sources alleging that the same group had previously pulled off a similar fraud in Rajahmundry.

The money generated by Jayathri through the non-delivery of flats was diverted and layered through multiple entities, many of which operated from fictitious or residential premises. These entities acted as conduits to route investor funds through non-genuine transactions, facilitating the concealment and layering of proceeds of crime (POC).

Based on an FIR, the Enforcement Directorate conducted searches at the premises of several entities, including Janapriya Group, Raja Developers & Builders, RK Ramesh, Satya Sai Transport, Sri Gayathri Homes, and Siva Sai Construction. On November 24, searches conducted under Section 17 of the Prevention of Money Laundering Act (PMLA) resulted in the seizure of digital devices and incriminating documents, as well as the freezing of bank accounts.

The seized material includes records of undelivered properties, Memorandums of Understanding (MOUs), alienation of project lands, and documents revealing the utilization and current placement of the POC. Initial scrutiny suggests coordinated collusion to misappropriate investor funds and divert project lands to third parties without allotting units to genuine purchasers.

This arrest and the ongoing investigation serve as a stark warning to homebuyers to be vigilant and cautious when dealing with real estate developers, especially those offering overly attractive schemes. The real estate sector is closely watching the developments in this case, hoping for justice for the affected homebuyers.