DMF Funds Intended for Mining-Affected Communities Come Under Enforcement Directorate Scrutiny
RAIPUR (India CSR): The Enforcement Directorate (ED) has announced arrests in two separate Chhattisgarh investigations—one concerning alleged irregularities and question-paper leaks in the Chhattisgarh Public Service Commission (CGPSC) examinations, and the other involving alleged diversion and commission payments linked to District Mineral Foundation (DMF) funds.
In official press releases issued on September 2, the ED said it arrested Utkarsh Chandrakar in the CGPSC money-laundering investigation and Satpal Singh Chabda in the DMF funds case. The agency has alleged a paper-leak-linked proceeds-of-crime trail exceeding Rs. 3 crore in the CGPSC matter, and alleged illegal commissions of around Rs. 31 crore in the DMF case.
Both matters remain under investigation. The ED’s claims are allegations at this stage and are subject to judicial scrutiny and trial.
CGPSC Probe Deepens
The CGPSC case concerns alleged large-scale irregularities, manipulation, question-paper leaks and corruption in the State Service Examinations conducted in 2020 and 2021. The ED said its money-laundering investigation was initiated on the basis of two FIRs registered by the Economic Offences Wing and Anti-Corruption Bureau, Raipur, and the CBI’s Anti-Corruption Branch, Raipur.
The underlying cases name former CGPSC Chairman Taman Singh Sonwani and others. The ED alleges that question papers were leaked through private brokers to relatives of accused persons and selected candidates in exchange for illegal gratification.
According to the agency, the alleged operation enabled fraudulent selection of candidates to senior public posts, including Deputy Collector and Deputy Superintendent of Police. These allegations go to the core of a public recruitment system, where candidates depend on equal opportunity and an examination process that is fair, confidential and merit-based.
₹3 Crore Cash Collection Alleged
The ED said its investigation found that Utkarsh Chandrakar and Dr Vikash Chandrakar allegedly generated proceeds of crime of more than Rs. 3 crore by collecting cash from job aspirants. The money was allegedly collected in exchange for assurances that leaked CGPSC-2021 question papers would be supplied.
Of this amount, the ED alleged that approximately Rs. 2.80 crore was handed over to Anil Chandrakar. The agency has not, in the September 2 release, stated that this amount was recovered; it has alleged that the money trail emerged during its investigation.
The ED further alleged that Utkarsh Chandrakar used the name, position and influence of his maternal uncle, K.K. Chandravanshi, who was Personal Assistant to the then Chief Minister of Chhattisgarh, to influence aspirants and collect money. The agency also alleged the use of the influence of the then Officer on Special Duty in the Chief Minister’s Office. The ED release does not state that K.K. Chandravanshi himself has been arrested in this latest action.
Searches Across Four Districts
The ED’s Raipur Zonal Office conducted searches at five premises in Raipur, Durg, Dhamtari and Jashpur on September 1 under the Prevention of Money Laundering Act, 2002.
The agency said it had earlier searched premises in the CGPSC matter on June 3, 2026. It said the latest action was based on evidence gathered during the earlier searches, statements recorded under Section 50 of the PMLA, digital evidence retrieved from Utkarsh Chandrakar’s mobile phone, and analysis of bank statements.
The ED alleged that this material showed his involvement in the generation, acquisition, possession, concealment, layering, transfer, use and projection of proceeds of crime as untainted property. Utkarsh Chandrakar was arrested on September 1 under Section 19 of the PMLA.
The agency said it seized documents, digital devices, financial records, property-related papers and other material relevant to the probe. The investigation remains ongoing.
DMF Funds Under Scanner
On the same day, the ED also announced the arrest of Satpal Singh Chabda in a separate money-laundering case linked to the alleged misappropriation of District Mineral Foundation funds in Chhattisgarh.
District Mineral Foundation Trusts are constituted in mining-affected districts to support people and areas impacted by mining activities. Such funds are intended for development priorities including drinking water, health, education, environmental protection, livelihood support and infrastructure in mining-affected communities.
The ED said that Chhattisgarh districts received approximately Rs. 9,188.20 crore through DMF Trusts during FY2020 to FY2024. It has alleged that part of this pool was diverted from its intended public-purpose use through a system that favoured supply-oriented works, where inflated pricing and generation of commissions were allegedly easier.
Alleged Commission System
According to the ED, a “well-organised syndicate” of public servants, liaisoners and vendors misused DMF Trust funds. The agency alleged that a substantial share of the funds was routed through the Chhattisgarh Rajya Beej Evam Krishi Vikas Nigam, commonly called Beej Nigam.
The ED said agents and liaisoners allegedly charged commissions ranging from 25% to 50% of the base value of purchase orders issued to rate-contract-holder entities. It alleged that a substantial part of these commissions was passed on to public servants and influential persons in return for the issuance of work orders and release of payments.
These are serious allegations because DMF resources are meant to address the long-term social and environmental costs of mining. If the alleged diversion is established, it would mean that resources meant for mining-affected families and communities were compromised through procurement and payment processes.
₹31 Crore Illegal Commission Alleged
The ED has described Satpal Singh Chabda as one of the principal liaisoners and financial coordinators in the alleged network. It alleged that he identified supply-based DMF works with high commission potential, allocated them among selected vendors on a percentage basis, facilitated the issuance of work orders and release of payments, collected commissions from vendors, and participated in their distribution.
The agency said that its analysis of banking transactions and statements recorded under Sections 17 and 50 of the PMLA showed that Chabda allegedly received illegal commissions aggregating about Rs. 31 crore. The ED alleged that the money was received in accounts held by him, his family members, Hindu Undivided Families and entities under his control.
Chabda was arrested on September 1 under Section 19 of the PMLA and produced before the Special PMLA Court in Raipur. The court granted the ED five days’ custody remand, according to the agency.
What the Twin Actions Mean
The CGPSC and DMF cases concern two very different public systems: recruitment to state services and the use of funds meant for mining-affected communities. Yet both investigations raise a common governance concern—whether public institutions and public resources were allegedly used to create private benefit.
In the CGPSC matter, the central allegation is that the integrity of a competitive recruitment examination was compromised. In the DMF matter, the allegation is that public welfare resources were manipulated through procurement and commission arrangements.
The ED’s latest actions do not conclude either case. Its evidence, allegations and arrests will be tested through the legal process, while the accused have the right to defend themselves. Further investigation is continuing in both matters.
