The directorate of enforcement (ED) has arrested S Vasudevan, chairman and managing director (CMD) of Ozone Urbana Infra Developers Pvt Ltd, in a money-laundering investigation into the alleged diversion of ₹927.22 crore collected from homebuyers who were promised apartments but left waiting for possession.
Mr Vasudevan, the company's promoter, was arrested by the ED's Bengaluru Zonal Office on 30 September 2026 under the Prevention of Money Laundering Act (PMLA), 2002. He was produced before a special PMLA court in Bengaluru on 1 October 2026, which remanded him to 14 days of ED custody for further investigation.
According to the agency, Ozone Urbana Infra Developers and its promoter allegedly collected money from homebuyers but failed to complete the promised apartments or refund the amounts deposited. ED suspects that the funds were dishonestly retained and diverted rather than being used for the projects for which they were collected.
The arrest follows an investigation based on multiple first information reports (FIRs) registered at various police stations in Bengaluru under Sections 419, 420 and 120B of the Indian Penal Code, 1860, dealing with cheating by personation, cheating and criminal conspiracy.
Central bureau of investigation (CBI) also registered a case against the company and its promoter on the directions of the Supreme Court, ED said.
The arrest comes nearly a year after the ED provisionally attached immovable properties worth ₹423.378 crore in the case.
The attachment followed searches conducted by the ED on 1 August 2025, at several premises linked to the case. The agency said it had seized documents relevant to the investigation.
According to ED's latest statement, the investigation has since gathered material pointing to the alleged diversion of ₹927.22 crore. The agency said Mr Vasudevan's arrest was necessary to investigate how the suspected proceeds of crime were generated, moved through different entities and ultimately used.
The investigation is also examining the role of various group companies and individuals allegedly involved in routing the funds.
At the centre of the case are allegations that Ozone Urbana attracted buyers by offering to pay their equated monthly instalments (EMIs) during construction until their flats were handed over.
Such arrangements, commonly known as subvention schemes, are designed to ease the financial burden on homebuyers during construction. Under the arrangement described in the complaints, buyers were led to believe that the developer would service the EMIs until their apartments were ready.
ED alleges that the company failed to honour these commitments, did not complete the flats and neither handed over possession nor refunded the money deposited by buyers. The agency further alleges that the upfront booking amounts and loan funds were misappropriated.
One of the projects highlighted in the report was The Metrozone in Chennai's Anna Nagar, launched in 2008. Homebuyers alleged that the project remained incomplete and that buyers who had been assured that the developer would pay their EMIs until possession were subsequently left facing repayment demands from banks.
The report also highlighted complaints concerning Ozone Urbana in north Bengaluru, where buyers alleged delays in construction, non-compliance with court orders and instances of the same apartment being sold to more than one buyer.
A first information report filed by the Ozone Urbana Residents Welfare Association, allegedly put the overall fraud at ₹3,300 crore. The complaint reportedly included ₹1,500 crore raised through mortgage loans in buyers' names and ₹1,800 crore collected directly from them.
These figures relate to allegations in that complaint and are distinct from the ₹927.22 crore that the ED says it has identified as proceeds of crime in its investigation.
The report also referred to proceedings before the Karnataka Real Estate Regulatory Authority (K-RERA) over alleged non-compliance with refund orders. It said the authority had sought to hold directors personally accountable for outstanding dues to buyers.
The complaints reflect the wider difficulties faced by homebuyers when projects remain incomplete, promised refunds are not made and loan repayments continue despite the absence of possession.
ED said parallel investigations under the PMLA have also been initiated on the basis of three separate FIRs registered by the CBI's economic offences-I unit in New Delhi against Ozone Infra Developers, Ozone Realtors Pvt Ltd and Ozone Projects Pvt Ltd over alleged fraud against homebuyers.
Mr Vasudevan is a common director in all three companies, according to the agency.
ED said that further investigation is underway.
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