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ED Arrests Ex-Managing Director R Leelavathi In Karnataka Bhovi 'Scam'

After the arrest, Leelavathi was produced in the court, where the court sent her to 7-day ED custody.

The Enforcement Directorate (ED) has arrested R Leelavathi, the former Managing Director of the Karnataka Bhovi Development Corporation (KBDC), in connection with a multi-crore money laundering case. The arrest follows allegations of large-scale embezzlement involving the diversion of public funds through fake accounts.

Leelavathy was taken into custody on April 12 and presented before a special court under the Prevention of Money Laundering Act (PMLA) in Bengaluru, where the court sent her to 7-day ED custody.

ED had earlier raided several places in Bengaluru on 4 April 2025. These included KBDC's office (VV Tower, Bengaluru) and the houses of Leelavathi. During the raid, many important documents, digital records and evidence were found, which showed that property was acquired illegally through money laundering.

The Details Of Probe 

According to the ED, as per PTI, Leelavathy played a key role in orchestrating the embezzlement scheme by setting up fraudulent bank accounts under fake names, in collaboration with Nagarajappa, Subbappa (the then Superintendent of KBDC), and others. These fake accounts were allegedly used to siphon funds from the KBDC to illegitimate entities, and ultimately to friends and family members of the accused.

The investigation also revealed that Leelavathi had opened bank accounts in the name of her sister (Late Mangala Ramu) and through these accounts, she layered money and sent it to her family and friends. On the basis of all these evidence, ED arrested R Leelavathi reportedly in connection with the money laundering.

This is the second arrest in Karnataka Bhovi Development Corporation case. Earlier, former KBDC general manager B K Nagarajappa was arrested after searches.

This money laundering investigation stems from several FIRs registered by the Karnataka Police over alleged fund misuse and diversion within the KBDC.

ALSO READ: Karnataka HC Issues Notice To CM Siddaramaiah, Wife Over Plea Seeking CBI Probe In MUDA Case

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