ED demands FIR against TN minister KN Nehru, claims massive hawala racket

The Enforcement Directorate has unearthed documentary and digital evidence of an alleged ₹1,020-crore tender manipulation and kickback racket linked to Tamil Nadu Municipal Administration Minister KN Nehru, highly placed sources told The Federal.

The ED has fired off a 258-page dossier to the Tamil Nadu Chief Secretary, the state Director General of Police and the Directorate of Vigilance and Anti-Corruption (DVAC) state unit, urging the immediate registration of an FIR against Nehru under the Prevention of Money Laundering Act (PMLA) and related laws.

Second major case

This marks the second major probe targeting Nehru in recent months. On October 27, the ED alleged irregularities in an ₹888-crore job scam tied to his brother KN Ravichandran's firm, True Value Homes Pvt Ltd, uncovered during raids on a related bank fraud case. That racket allegedly involved 2,538 irregular appointments at ₹35 lakh each, funneled through the company.

After marathon raids last week at the residences and offices of Ravichandran and a clutch of close associates in Trichy, Coimbatore and Chennai, ED sleuths claim to have seized explosive material that leaves 'no room for doubt'.

Also read | Why BJP minister L Murugan is wrong about learning Hindi in Tamil Nadu

The searches supposedly yielded over 300 photographs from smartphones and digital devices showing Nehru with key players in the alleged network, alongside WhatsApp chats and other incriminating files, the sources said.

'Commission rate'

“We have Excel sheets, WhatsApp chats, handwritten ledgers and hawala chits. Every single rupee of bribe is accounted for,” a senior ED officer told The Federal on condition of anonymity. “The commission rate was fixed between 7% and 10%, often 7.5% on every municipal contract. We now have the complete list municipality-wise, project-wise, contractor-wise, promised commission and actual collection.”

The scam allegedly spans a web of tenders for construction works, public toilets, outsourcing services, NABARD schemes, sanitation worker outsourcing, worker housing schemes, and water/pond renovation projects under the Municipal Administration and Water Supply Department. Sources say tenders were pre-decided, with contractors handpicked to ensure kickback flows.

Investigators say the ₹1,020-crore figure has emerged from records recovered from just two individuals. “If only two middlemen maintained accounts of over ₹1,000 crore in two years, the real scale could be several times higher,” the officer added.

The seized spreadsheets allegedly contain a separate column titled “Party Fund”, suggesting that a substantial portion of the illicit collections might have been channelled to the DMK.

Routing of funds

The ED has also traced alleged hawala transactions through which kickbacks were supposedly sent to various states and overseas destinations, including Dubai.

“We have recovered hawala slips, bank statements and international remittance records,” the officer said. Investigators suspect the laundered funds were siphoned abroad or through informal channels to evade detection.

The ED's letter to state authorities alleges a 'criminal conspiracy' in pre-deciding tenders, leading to massive corruption.

DMK defends minister

The DMK leadership has closed ranks around Nehru, dismissing the ED's moves as a vendetta by the BJP-led Union government. Emerging from a heated meeting of Trichy district DMK secretaries at the party’s headquarters, Kalaignar Arivalayam, KN Nehru brushed off reporters' questions with a curt dismissal, “That’s nothing... I’ll handle it,” before speeding away.

Also read | Cong fast-tracks 2026 seat-sharing talks with DMK; delegation meets Stalin

At a press conference inside the party HQ, DMK organisation secretary RS Bharathi struck a defiant tone. “We will face the Enforcement Directorate’s investigation with courage. There’s no burden on our conscience, so there’s no fear on our path,” he declared. Bharathi accused the Union government of weaponising central agencies against the DMK. “Because the DMK has the backing of every section of society, the Centre is trying to intimidate us through the ED,” he added.

Nehru himself has previously denied similar allegations in the job scam, insisting, “In 2012, 2013, 2014, 2015, and 2017, various positions were selected through Anna University, and those jobs were filled. The same Anna University has now conducted this appointment too.”

BJP, AIADMK up in arms

Opposition parties have pounced on the revelations. Tamil Nadu BJP ex-president K Annamalai demanded the immediate resignation of Nehru and a CBI probe monitored by the Madras High Court. “If the Chief Minister has even an iota of shame, he should sack Nehru tonight,” Annamalai said.

AIADMK general secretary Edappadi K Palaniswami, who has long alleged a ‘job racket’ run by Nehru and his brothers, called for a full judicial inquiry. “This is just the tip of the iceberg in the DMK’s loot of public money,” he said in a statement.

Senior officials in the Tamil Nadu DVAC have confirmed to The Federal that they have received the ED's detailed communication along with seized evidence in the ₹1,020-crore municipal tender scam. “We are examining the material and will proceed as per the DVAC manual,” a top officer said on condition of anonymity.

State govt approval

However, registering an FIR against Nehru, one of the most powerful and politically indispensable ministers in the MK Stalin cabinet, may prove complicated. Sources within the anti-corruption wing point out that even a preliminary enquiry against a sitting minister requires prior approval from the state government under Section 17A of the Prevention of Corruption Act. “Without the government’s nod, DVAC’s hands are tied,” the officer added.

Veteran political journalist Priyan, who has covered the DMK for over two decades, believes the timing of the 'leaks' is deliberate.

“KN Nehru remains the DMK’s biggest electoral asset in the Cauvery delta region. With local body polls and possible Assembly by-elections on the horizon, the ED appears to be weaponising selective leaks about its letter to DVAC and the Chief Secretary to paralyse Nehru’s campaign machinery and keep him bogged down in controversy,” Priyan told The Federal.