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The Directorate of Enforcement (ED) has flagged an alleged scam in Tamil Nadu about the manipulation of tenders in the Municipal Administration and Water Supply (MAWS) Department. The agency has alleged that at least Rs 1,020 crore has been collected as bribes by widespread tender rigging and has cited digital evidence obtained during the searches conducted on Tamil Nadu Minister for Municipal Administration KN Nehru, his family members and associates in April this year.
The ED has sent a 258-page dossier to the state Chief Secretary, Head of Police Force (HoPF) and Directorate of Vigilance and Anti-Corruption (DVAC) under section 66(2) of the Prevention of Money Laundering Act (PMLA) on December 3, seeking registration of an FIR by TN police to investigate the corruption. This would enable ED to start a probe under the PMLA, the agency said in the letter.
This is the second letter ED has written to the Tamil Nadu government flagging a massive scam in the MAWS Department headed by DMK Minister KN Nehru.
On October 27, the ED had written to the DGP seeking registration of an FIR into the cash-for-job scam in the MAWS department. In its communication, the ED had then alleged that several candidates paid bribes ranging between Rs 25 lakh and Rs 35 lakh to secure positions such as assistant engineers, junior engineers and town planning officers in the MAWS Department.
As per the law, the ED cannot unilaterally proceed with a money laundering investigation unless there is an existing FIR registered by an investigation agency. However, section 66(2) of PMLA allows ED to share evidence with other agencies and urge them to register an FIR under the scheduled offences to enable ED to begin their money laundering probe.
The ED has alleged that contractors executing works of the MAWS Department paid 7.5 to 10% of the contract value to associates of Minister KN Nehru. The contractors were beneficiaries of tenders which were manipulated or pre-decided, ED said, citing WhatsApp chats recovered from phones of Nehru’s associates during the raid.
The agency also alleged that bribes were collected from MAWS contractors as ‘party funds’. Additionally, even officers posted in the Department were asked to collect bribes from contractors and transfer them to the Minister and his associates, the ED said.
The ED has cited multiple specific instances of what they term direct evidence of payment of bribes totalling Rs 1,020 crore. This is based on messages or chats or calculation sheets allegedly retrieved from the phones of the Minister’s associates, ED said.
This evidence is only the “tip of an iceberg” of a larger scam in government contracts, ED alleged.
ED has further alleged that bribes were collected from almost every contract, including community toilets, outsourcing of sanitation workers, NABARD projects, sweeper quarters, village roads, water/lake work, etc.
Based on the preliminary probe conducted by the agency into the money trail, the ED alleged that bribes were collected during project clearance and passing of bills by government officers at various levels, which effectively translates to 20-25% of the contract value. The bribe money was then allegedly transferred through hawala networks within and outside the country.
ED said they stumbled upon this evidence in digital devices during searches on Nehru and his associates in April while probing a PMLA case relating to a CBI bank fraud investigation involving True Value Homes (TVH) owned by Nehru’s brother KN Ravichandran.
The PMLA investigation was closed since the CBI case was quashed by the Madras High Court. The supposed evidence was transferred to other cases, ED said.
ED alleged that public funds have been siphoned off for “luxurious lifestyles,” creation of personal assets and political expenditure.
Minister Nehru and the Department’s Principal Secretary D Karthikeyan did not respond to calls and messages seeking comment. This article will be updated if we receive a response.
Citing the Supreme Court order in the Vijay Madanlal Choudhary case, ED has requested the state government to register cases to investigate the alleged corruption. In a clear warning to the state police, the agency has stated that not registering an FIR would amount to knowingly assisting the accused in the collection of bribes (generating proceeds of crime).
This is not the first time that ED has invoked section 66(2) of PMLA to send letters to TN police in a bid to get FIRs registered.
In June 2024, ED had written to the TN HoPF, attaching evidence pertaining to the alleged river sand mining scam, seeking an FIR to investigate collusion between government officials and private contractors.
In May 2025, ED wrote to DVAC, sharing details of their PMLA probe into the alleged Rs 27.9 crore bribes paid by Shriram Properties to former AIADMK housing minister R Vaithilingam and his sons in 2015-16 for getting approvals for a housing project.
The DVAC had filed two FIRs against the Orathanadu AIADMK MLA in September 2024, based on which the ED had initiated and completed its probe.