ED arrests Ozone Urbana CMD in Rs 927 crore homebuyer money laundering probe

The Enforcement Action

The Directorate of Enforcement (ED), Bengaluru Zonal Office, has arrested S. Vasudevan, chairman and managing director and promoter of M/s Ozone Urbana Infra Developers Pvt. Ltd., under Section 19 of the Prevention of Money Laundering Act (PMLA), 2002. According to the ED press release dated 02.10.2026, the arrest was made on 30.09.2026 in connection with the agency's money laundering investigation against the company "and Others".

The ED states that Mr Vasudevan was produced before the Special Court (PMLA), Bengaluru, on 01.10.2026, and that the court granted 14 days' ED custody for further investigation.

The ED alleges that the company and its main promoter collected Rs. 927.22 crore from homebuyers without delivering the apartments or units for which the money was paid. The arrest follows a Provisional Attachment Order dated 04.10.2025, under which the agency provisionally attached immovable properties valued at Rs. 423.38 crore, as recorded in the ED press release of 4 October 2025.

These are allegations made at the investigation stage. No court has found the company or its promoter guilty of any offence. Neither Ozone Urbana Infra Developers Pvt. Ltd. nor Mr Vasudevan has publicly responded to the arrest on the official record reviewed for this report.

How the Scheme Worked

The account below is the ED's own, drawn from its three press releases on the matter. Each element remains an allegation to be tested in court.

The project at the centre of the case is Ozone Urbana, an integrated township in Devanahalli Taluk, Bengaluru. According to the ED's release of 3 August 2025, the township was due to be handed over to buyers in 2018, but "till 2024, only 49% of the project was completed".

The ED alleges that buyers were drawn in through a pre-construction EMI offer. In the agency's words, the company induced customers "by offering to pay pre-construction EMIs till handing over the possession". In practice, a buyer would take a home loan, and the developer would promise to service the EMIs to the bank until the flat was ready. The ED says the company also offered "huge discounts" through schemes it describes as a "buyback scheme" and a "2X- scheme".

According to the agency, the company failed to honour those commitments. The ED alleges that the builder "neither delivered possession" of the residential units nor refunded deposits, and instead misappropriated the upfront booking amounts and loan amounts. The 2025 attachment release adds that the money was allegedly diverted to other group entities and associated individuals, including Mr Vasudevan himself, rather than being spent on construction. The ED also says it gathered evidence relating to the "double sale of few flats".

The procedural chronology, as the ED sets it out:

• FIRs: Multiple FIRs were registered at police stations in Bengaluru City under sections 419, 420 and 120B of the Indian Penal Code, 1860. The CBI, EO-I, New Delhi, separately registered an FIR against the company and its promoter on the direction of the Supreme Court.
• 01.08.2025: The ED searched 10 premises in Bengaluru and Mumbai under Section 17 of the PMLA and says it seized documents relating to the diversion of project funds.
• 04.10.2025: The ED issued a Provisional Attachment Order covering unsold stock in the Avenue project (92 flats) and the Aqua 2 project (13 flats), 4.5 acres of commercial land, and 179 acres of land at Kannehalli Village, Mudigere, linked to the promoter. The total value was Rs. 423.38 crore.
• 30.09.2026: Mr Vasudevan was arrested. He was remanded to ED custody on 01.10.2026.

The ED also says it has opened a parallel PMLA investigation based on three FIRs registered by the CBI, EO-I, New Delhi, against M/s Ozone Infra Developers Pvt. Ltd., M/s Ozone Realtors Pvt. Ltd. and M/s Ozone Projects Pvt. Ltd. According to the agency, Mr Vasudevan is a common director of all three companies.

The Law Invoked

Section 19 of the PMLA, 2002 is the arrest power. It allows an authorised ED officer to arrest a person if, on the basis of material in the officer's possession, the officer has reason to believe that the person is guilty of money laundering. The grounds must be recorded in writing, and the person must be produced before a court. The ED says the arrest was "effected pursuant to the material gathered during the investigation".

Section 17 of the PMLA is the power to search and seize, which the ED says it used on 01.08.2025. The press releases describe the October 2025 action only as a Provisional Attachment Order "under the provisions of the PMLA". This is the interim measure the Act provides to stop property alleged to be proceeds of crime from being disposed of while an investigation continues.

The PMLA case rests on predicate, or "scheduled", offences recorded in the FIRs. These are sections 419 (cheating by personation), 420 (cheating and dishonestly inducing delivery of property) and 120B (criminal conspiracy) of the Indian Penal Code, 1860. Without an underlying offence of this kind, there can be no money laundering case.

What Happens Next

The ED states that further investigation is in progress. The next steps follow standard PMLA procedure.

Custody, any further remand, and any bail application are decided by the Special Court (PMLA), Bengaluru. The 14 days of custody were granted on 01.10.2026, and later orders are for that court. If the ED concludes its investigation, it may file a prosecution complaint before the Special Court. The court would then decide whether to take cognizance and frame charges before any trial begins.

A provisional attachment is not a conviction and is not a forfeiture. It must be confirmed by the PMLA Adjudicating Authority. Affected parties can challenge it there, and then before the Appellate Tribunal and the High Court. The CBI's FIRs and the Bengaluru police FIRs will proceed separately in the courts that have jurisdiction over them.

Every stage remains subject to due process. An arrest under the PMLA records the ED's belief based on the material it holds. It is not a finding of guilt, and the accused are entitled to defend themselves in court.

What It Means

For homebuyers, the case illustrates a structure that recurs in disputes over stalled housing projects: the subvention or "pre-EMI" arrangement. Under this arrangement, the buyer takes the loan in their own name, the bank pays the money to the developer, and the developer promises to cover the EMIs until possession. If the developer stops paying, the bank still looks to the borrower for repayment. Before signing such a deal, it is worth reading the tripartite agreement closely to see who is liable for the EMIs if the developer defaults. It is also worth asking the lender whether the disbursement is linked to construction stages.

Practical checks protect buyers. Confirm that the project is registered with the state real estate regulator (for Karnataka, the Karnataka Real Estate Regulatory Authority) and compare the registered completion date with the brochure. Look up the developer's complaint history on the regulator's portal. Treat buyback or "2X" offers that promise unusual returns on a flat purchase as a reason for extra caution.

Buyers already affected by the Ozone Urbana project should note that provisionally attached assets are frozen, not distributed. In other PMLA matters, Special Courts have allowed attached assets to be used for restitution to genuine claimants. Buyers should keep their allotment letters, payment receipts and loan documents, and follow the proceedings through their own lawyers or homebuyer associations. Complaints before the state real estate regulator and consumer forums remain open to them alongside the criminal process.

FAQ

Does the ED's action mean the people it named are guilty?

No. A provisional attachment and an arrest under the PMLA, like an FIR, contain allegations, not findings of guilt. The accused are presumed innocent until proven guilty, and due process continues. Whether any offence was committed will be decided by the courts after trial, on the evidence placed before them.

What exactly did the ED do?

According to its release dated 02.10.2026, the ED's Bengaluru Zonal Office arrested S. Vasudevan, chairman and managing director and promoter of M/s Ozone Urbana Infra Developers Pvt. Ltd., on 30.09.2026 under Section 19 of the PMLA. The Special Court (PMLA), Bengaluru, granted 14 days' ED custody on 01.10.2026. The agency had earlier provisionally attached properties worth Rs. 423.38 crore.

What happens to the attached flats and land?

Provisionally attached properties cannot be transferred or otherwise dealt with while the attachment stands. They are not confiscated. The attachment must be confirmed by the PMLA Adjudicating Authority and can be challenged there and on appeal. Final confiscation, or release towards restitution, depends on the outcome of the proceedings.

What should affected Ozone Urbana buyers do?

Keep every allotment letter, receipt, builder-buyer agreement and loan document. Check your loan account with your bank to confirm whether pre-EMIs were actually paid by the developer. Consider filing or joining complaints with the Karnataka Real Estate Regulatory Authority or a consumer forum, and get independent legal advice on how to raise a claim in the ongoing proceedings.

Where can I read the official record?

The ED has published three press releases on this matter on its website: the search release of 3 August 2025, the provisional attachment release of 4 October 2025, and the arrest release dated 02.10.2026. All of them are available in the press release section of enforcementdirectorate.gov.in.

This report is based on the official Directorate of Enforcement press release dated 2 October 2026 and the ED's earlier attachment release. It was surfaced via coverage aggregated by Google News.