Raipur, September 3: The Enforcement Directorate (ED) has arrested Satpal Singh Chhabra in connection with the District Mineral Foundation (DMF) scam in Chhattisgarh. This action was taken under the provisions of the Prevention of Money Laundering Act (PMLA), 2002.
Chhabra was apprehended on Tuesday and presented before the special PMLA court in Raipur, which granted the ED a five-day custody.
According to the ED, the investigation is based on multiple FIRs registered by the Raipur-based Anti-Corruption Bureau (ACB) and the Economic Offences Wing (EOW) concerning the misuse of DMF funds.
These trusts, established in each district for the benefit of communities affected by mining activities, were allegedly exploited by a network of public servants, intermediaries, and vendors.
Between the fiscal years 2019-20 and 2023-24, districts received approximately ₹9,188.20 crores under the DMF scheme. However, the ED stated that a portion of these funds was embezzled by prioritizing supply-oriented activities, leading to arbitrary pricing and commission earnings. A significant amount of the funds was routed through the Chhattisgarh State Seed and Agricultural Development Corporation (Seed Corporation), where agents and intermediaries reportedly charged commissions ranging from 25% to 50% based on the base price of purchase orders issued to contractor entities.
The statement indicated that these commissions were then distributed among government employees and influential individuals to secure work orders and facilitate payments.
Chhabra is accused of playing a central role as an intermediary and financial coordinator. He identified lucrative supply-based DMFT activities, allocated them among selected vendors, facilitated the issuance of work orders, ensured payment releases, and collected commissions for distribution within the syndicate.
According to the ED’s press release, incriminating documents related to the scam were seized during a search conducted in September 2025 under Section 17(1) of the PMLA. Further analysis of banking transactions and details recorded under Sections 17 and 50 of the PMLA revealed that Chhabra received approximately ₹31 crores in illegal commissions. This money, classified as proceeds of crime, was found in accounts belonging to his family members, Hindu Undivided Families (HUF), and entities under his control. Consequently, he was arrested under Section 19 of the PMLA, 2002.
The ED confirmed that the investigation into the DMF scam is ongoing.
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