Dentsu India offices raided amid allegations of $16.5 million embezzlement scheme

The Enforcement Directorate (ED), India's premier agency investigating money laundering and enforcing foreign exchange laws, conducted raids at 19 locations across Mumbai, Delhi, and Gurugram as part of an ongoing investigation into a Rs 137 crore ($16.5 million) embezzlement case involving Dentsu India, Suumaya Group, and other entities.

The raids, carried out on December 10, 2024, reportedly uncovered Rs 46 lakh ($55,000) in cash, foreign currency worth $4,800, and gold bars valued at Rs 3.4 crore ($408,000), along with incriminating documents, digital devices, and evidence of immovable property transactions.

ED, Mumbai conducted search operations on 10/12/2024, under the PMLA, 2002 at 19 locations in Mumbai, Delhi and Gurgaon as part of an ongoing probe in Summaya-Dentsu case. During the searches, various incriminating documents, digital devices, Indian currency of Rs. 46 Lakh,…

— ED (@dir_ed) December 12, 2024

The raids are linked to a 2022 money laundering case filed by a "non-banking financial company" with the Mumbai police against Dentsu Communications India, Suumaya Industries, its promoters, and a few other parties. The allegations, which Campaign Asia-Pacific has not verified, reportedly involve fraudulent financial transactions and fabricated government contracts tied to the Need to Feed programme, an initiative to provide food to underserved communities.

In an official press statement, ED alleged: “They are accused of conspiring together and embezzling the funds to the tune of Rs 137 crore under the guise of promising future 'Need to Feed' programme advantages.

"Other incriminating documents related to immovable property transactions, digital devices have been found and seized during the search proceedings."

According to ED, the accused allegedly falsified documents to create the illusion of legitimate transactions involving government contracts. These fabricated deals were then used to inflate Suumaya Industries’ turnover, misleading investors and artificially boosting its stock price. According to the ED, the proceeds from this alleged fraud were reportedly funnelled through offshore accounts and converted into high-value assets, including gold and cash, which were seized during the raids. Investigators reportedly recovered documents and digital evidence during the raids, pointing to a coordinated scheme.

It’s unclear if Suumaya Industries, an Indian conglomerate involved in various industries, was a client of Dentsu’s in the Need to Feed programme. No arrests have been reported at this stage of the investigation.

In response, Dentsu India has released an official statement stating, “In 2021, we identified suspected fraudulent activity conducted by third parties and some of InDeed’s former employees, against whom criminal complaints have also been filed. This activity was limited to the InDeed business only. 

"Three years ago, we proactively reported the matter to the relevant authorities and have been fully co-operating since. It is in connection with the same matter that the Enforcement Directorate (‘ED’) visited Dentsu India’s office in Mumbai on December 10, 2024. The ED has not found or seized any properties from Dentsu’s premises. We take fraud and wrongdoing very seriously with a zero-tolerance policy towards any such behaviour. We will continue to co-operate with the authorities.”

The statement clarifies Dentsu India’s position, asserting that the fraudulent activity was restricted to its InDeed business and involved third parties and former employees.

This is not the first time Dentsu India has found itself under scrutiny.

The company has faced allegations of financial misconduct, including a 2022 income tax raid, as part of an investigation into alleged tax irregularities. Sources at the time confirmed to local media that the raid was part of a larger probe into financial discrepancies with one of its clients, a global smartphone brand. Coincidentally, on the day of the raid, an internal memo was sent by Dentsu India to its employees instructing them to work from home “until further notice”.

While the timing of this memo coincided directly with the IT raid, it remains unclear whether the directive was linked to the investigation or simply a coincidence. Dentsu India declined to comment on the matter at the time, leaving room for speculation about the reasons behind the sudden work-from-home order.

Globally, Dentsu Group has faced other prominent controversies, including its involvement in the 2020 Tokyo Olympics bribery scandal. The company, a key marketing partner for the Olympics, was implicated in a corruption scheme that allegedly involved facilitating illicit payments to secure sponsorship deals. The scandal led to multiple arrests in Japan and severely damaged Dentsu’s reputation as a global advertising giant.

Campaign Asia-Pacific will continue to monitor this developing story.

Editor's note: The story has been edited to include Dentsu India's statement.