ED Takes Over ₹2,438 Crore Aarudhra Gold Ponzi Investigation as Political Connections Surface
India's Enforcement Directorate has seized control of the investigation into Tamil Nadu's largest financial fraud, a ₹2,438 crore ponzi scheme that allegedly defrauded more than 100,000 investors through Aarudhra Gold Trading Private Limited. The federal agency's intervention, invoking the Prevention of Money Laundering Act, comes after state investigators uncovered a sophisticated network of shell companies, international money transfers, and political connections designed to shield the operation from regulatory scrutiny.
Background and Context
The scheme, operated from Chennai's Aminjikarai district between September 2020 and May 2022, promised investors extraordinary returns of 25-30% monthly interest, 5% referral commissions, and gold coin gifts. According to the Economic Offences Wing's initial investigation, the company masqueraded as a legitimate gold trading entity while operating what investigators describe as a classic ponzi structure—using new deposits to pay earlier investors rather than generating genuine returns. The operation collapsed in May 2022 when the company abruptly ceased operations, leaving tens of thousands of depositors facing financial ruin.
Key Figures and Entities
The investigation has identified over 20 key accused, including managing director P Aarudhra Rajasekar (also known as V Rajasekar), who fled India following the scheme's collapse. Rajasekar was detained by Interpol in Abu Dhabi in December 2023 after a Red Corner Notice, though extradition proceedings remain stalled. Other arrested figures include K Harish, a suspended BJP functionary apprehended in March 2023, and S Muthukumar, captured at Dubai airport after 10 months as a fugitive. Actor-producer RK Suresh, identified as a BJP affiliate, faces allegations of receiving ₹20 crore to influence the initial investigation and protect company directors through political connections.
Legal and Financial Mechanisms
State authorities initially filed 19 First Information Reports under IPC Sections 420 (cheating) and 406 (criminal breach of trust), alongside provisions of the Banning of Unregulated Deposit Schemes Act 2019 and Tamil Nadu Protection of Interests of Depositors Act 1997. The ED's subsequent intervention under the Prevention of Money Laundering Act has enabled investigators to trace assets through complex financial networks, including luxury properties in Dubai, high-end vehicles, benami bank accounts, and overseas hawala transactions. Approximately ₹800 crore in assets have already been attached by authorities, though the full extent of the money trail remains under investigation.
International Implications and Policy Response
The case highlights significant gaps in international financial regulation and cooperation, particularly concerning cross-border money laundering through Gulf jurisdictions. Despite multiple extradition requests through India's Ministry of External Affairs, diplomatic delays in the UAE have prevented key suspects from facing justice in India. The investigation has also exposed vulnerabilities in India's financial regulatory framework, where non-banking financial companies can operate with minimal oversight while offering deposit schemes that mimic traditional banking products without appropriate safeguards.
Sources
This report draws on Economic Offences Wing case filings, Enforcement Directorate statements, court records from the Madras High Court, and official government notifications regarding the Prevention of Money Laundering Act and Banning of Unregulated Deposit Schemes Act. Information also comes from verified law enforcement announcements regarding arrests and extradition proceedings between 2022 and 2024.
