Sheep Rearing Scheme Scandal: ED Searches 8 Locations

The Enforcement Directorate (ED), Hyderabad Zonal Office, conducted search operations on July 30, 2025, at eight locations in Hyderabad under the provisions of the Prevention of Money Laundering Act (PMLA), 2002, in connection with financial irregularities in the implementation of the Sheep Rearing Development Scheme (SRDS) in Telangana.

Searches were carried out at the premises of G Kalyan Kumar (OSD to the then Animal Husbandry Minister Talasani Srinivas Yadav), as well as certain beneficiaries and middlemen identified during the ED's investigation.

The ED initiated its investigation based on FIRs registered by the Anti-Corruption Bureau (ACB), Hyderabad.

In one FIR, it was alleged that after the formation of the new government in the State, the OSD to Talasani Srinivas Yadav had forcibly removed some official records by breaking into the department's office.

Another FIR, filed by a sheep merchant, alleged that Rs 2.1 crore due for the supply of sheep units was siphoned off by departmental assistant directors by diverting the amount to unrelated accounts.

The Comptroller and Auditor General's report for the period ending March 2021 revealed several irregularities in the implementation of the SRDS, including non-maintenance of beneficiary-wise details, improper documentation of transportation invoices and payments, payments against invoices with fake/passenger/non-transport vehicle registration numbers, duplicate tags issued to sheep units, and allotment of sheep to deceased or non-existent individuals.

The CAG audit covered only 7 out of 33 districts in Telangana and estimated a loss of Rs 253.93 crore. Projecting that, the loss across all districts is likely to exceed Rs 1,000 crore.

The ED also substantiated the CAG's findings, with evidence of payments made to fictitious vendors and recycling of sheep units to fraudulently claim disbursements from government funds. The ED's investigation revealed that substantial funds were transferred to the bank accounts of various individuals and entities purportedly as payment for supplying sheep to beneficiaries. However, these recipients had no prior involvement with the sheep trade, and no actual sale or purchase of sheep had taken place. Government funds were thus illegally diverted to the bank accounts of bogus vendors.

The search operations resulted in the recovery and seizure of incriminating materials, including evidence of illegal payments in the form of kickbacks to government officials and others.

Documents related to numerous bank accounts - including blank cheques, passbooks and debit cards - linked to over 200 suspected dummy or mule accounts connected with an illegal online betting application were also recovered.

31 used mobile phones and over 20 SIM cards suspected to have been used in the illegal operations were seized.