The Central Crime Branch in Chennai has arrested three men in connection with an alleged multi-state loan fraud estimated to exceed ₹100 crore. According to the supplied report, the group allegedly targeted business owners and other borrowers by promising to arrange substantial commercial loans in exchange for large advance service fees.
The investigation followed a complaint by Chennai-based entrepreneur N. Manivannan, who alleged that he paid ₹2 crore after being assured that funding would be arranged for his industrial development plans. The promised loan reportedly never materialised.
Police are investigating the alleged operation's financial transactions and possible links to complaints registered in Tamil Nadu and Kerala.
Entrepreneur Alleges ₹2 Crore Loss in Advance-Fee Deal
According to the report, the accused approached Manivannan with assurances that they could facilitate a substantial business loan. They allegedly demanded an advance payment to process the proposed funding.
The complainant reportedly paid ₹2 crore after relying on those assurances. He was also allegedly directed to sign cheques and blank sheets of paper.
The promised funding did not arrive, the report states. Instead, the accused allegedly demanded further payments and threatened the complainant when he resisted.
Following the complaint, the Central Crime Branch formed a special investigative team. Police arrested three men late Wednesday night:
Muthuvel, 48, also known as Muthukrishna and B.M. Chettiyar
B. Jagan, 44
A. Thirukumaran, 51
The allegations remain subject to investigation and judicial proceedings. The arrests do not, by themselves, establish the accused persons' guilt.
Investigators Suspect a Network Operating Across States
Police reportedly estimate that the alleged operation generated more than ₹100 crore in illicit turnover. The group is accused of presenting itself as a financial intermediary capable of connecting borrowers with banks and securing large loan approvals.
According to investigators, prospective borrowers were allegedly asked to pay substantial commissions or advance charges in exchange for assistance with financing.
Multiple complaints and criminal cases have reportedly been registered against the group in Tamil Nadu, including in Dharmapuri, as well as in Kerala. Investigators are examining whether the accused had genuine connections with lending institutions or relied on fraudulent documentation to persuade borrowers to make payments.
The reported multi-state dimension has widened the investigation beyond the original Chennai complaint. Police are reviewing financial records and contacting other businesses that may have been approached under similar arrangements.
Financial Trail Under Investigation
Forensic accounting teams are reportedly tracing the movement of funds to determine where the money collected from prospective borrowers was transferred. Investigators are also examining whether transactions involving different complainants are connected and whether additional victims may have been affected.
The financial trail could help establish the scale of the alleged operation, identify the recipients of the funds and determine whether the same methods were used across different locations.
In cases involving suspected financial deception, examining transaction records, payment trails and supporting documentation can be important to understanding how money moved between individuals and entities. Relevant professional support may include financial investigation services.
Court Remands the Accused; Police Warn Borrowers
The three accused were reportedly produced before a local court and remanded to judicial custody while the investigation continues. Police are reviewing earlier criminal cases and complaints to assess whether they are connected to the current allegations.
Following the arrests, the Chennai police commissioner urged business owners and other borrowers to use formal banking channels when applying for credit. Authorities also warned against handing over signed blank cheques or documents to unverified intermediaries.
The advisory highlights several precautions for people seeking commercial financing:
Verify the intermediary: Confirm the identity and credentials of anyone claiming to arrange a bank loan.
Check directly with lenders: Contact the relevant bank or financial institution to verify whether an offer or approval is genuine.
Be cautious about advance fees: Investigate claims that a large upfront commission is necessary to guarantee loan approval.
Avoid signing blank documents: Do not hand over signed blank cheques or papers that could later be misused.
Keep transaction records: Retain agreements, receipts, bank statements and communications with the intermediary.
Report suspicious activity: Approach the appropriate police or regulatory authorities if fraud is suspected.
An advance payment alone does not establish that a transaction is fraudulent, but promises of guaranteed financing combined with pressure to pay large fees warrant careful scrutiny.
What Happens Next?
The investigation is expected to focus on the alleged financial network, the movement of funds and possible connections between complaints filed in different states. Police are also seeking to identify other businesses that may have been approached through similar loan-arrangement offers.
For business owners, the case is a reminder to verify financing arrangements independently before transferring money or signing documents. For investigators, tracing the financial transactions and establishing links among complaints will be important to determining the full scope of the alleged scam.