The Enforcement Directorate (ED) on Tuesday conducted simultaneous searches at 14 locations across Chandigarh, Mohali and Panchkula as part of its money laundering investigation into the alleged ₹645-crore Haryana government fund scam.
The latest searches have taken the investigation into the alleged diversion and laundering of government funds to jewellers and jewellery-related businesses in the Chandigarh Tricity. Establishments including Malik Jewellers, KLG Jewels and its associated entities, MB Gold Traders, Sham Jewellers and Sundar Jewellers were among those covered by the searches.
According to the investigating agency, funds allegedly withdrawn from government accounts were transferred through multiple bank accounts and subsequently routed through accounts linked to jewellers. The agency is examining whether these transactions were used to create the appearance of legitimate business dealings and conceal the alleged source of the money.
Investigation Focuses on Alleged Layering of Funds
The ED's action is part of a money laundering investigation based on an FIR registered by the Haryana Police in February 2026. The case is linked to alleged discrepancies in the balances of government accounts maintained by the Haryana Development and Panchayats Department with IDFC First Bank and AU Small Finance Bank.
During the investigation, the ED has claimed to have identified transactions through which government funds were allegedly transferred to various bank accounts. The money was then allegedly moved through multiple accounts and entities.
The agency is now examining the role of jewellery businesses in the alleged layering of funds. The focus is on tracing the movement of the money after it was withdrawn from government accounts, identifying the entities through which it passed and determining how the transactions were allegedly presented as legitimate business activity.
Malik Jewellers, KLG Jewels Among Businesses Under Scrutiny
The establishments covered in Tuesday's searches included Malik Jewellers, KLG Jewels and its associated entities, MB Gold Traders, Sham Jewellers and Sundar Jewellers.
The alleged role of a person identified as Gaurav Kansal is also being examined. According to the agency, he is suspected of acting as an intermediary in moving funds through different levels of the alleged transaction chain.
The ED said the searches resulted in the recovery of documents and other evidence that may provide information about the alleged routing, layering and concealment of funds and their presentation as legitimate money. The material recovered during the searches is being examined.
Probe Extends Beyond One Government Department
According to the ED's investigation, the alleged money laundering trail is not limited to accounts belonging to a single Haryana government department. The agency has claimed that funds connected with government accounts of various Haryana departments and the Chandigarh UT administration were also allegedly routed through jewellers.
The agency has further alleged that a portion of the money ultimately reached certain IAS officers and other government employees whose roles have emerged in connection with the alleged fraud involving IDFC First Bank accounts.
The Central Bureau of Investigation (CBI) has already taken action in the matter.
CBI Files Third Chargesheet Against Six IAS Officers
The case also involves a separate CBI investigation. According to the ED, the CBI has filed its third chargesheet before the special court in Panchkula against six Haryana-cadre IAS officers and other government employees in connection with the alleged bank fraud.
The developments have provided investigators with further links to examine the alleged movement of funds from government accounts, their transfer through multiple accounts and their subsequent routing through jewellery businesses.
The allegations remain subject to judicial proceedings, and the final determination of liability will depend on the outcome of the legal process.
Four Arrests and Action Against ₹211 Crore in Assets
The ED has already arrested four accused persons in connection with the money laundering case.
According to the agency, assets worth approximately ₹211 crore have so far been attached, seized or frozen during the investigation. The ED has also filed a prosecution complaint against 14 accused persons before the special PMLA court in Panchkula.
Following Tuesday's searches, investigators are expected to examine the newly recovered documents and other material alongside evidence collected during the earlier stages of the probe to establish the alleged money trail.