Police have detained Sulav Agrawal, a vice-chair of Nepal’s Shanker Group, in connection with a widening money laundering investigation, marking another major escalation in a probe that is pulling one of the country’s oldest business conglomerates deeper into scrutiny.

The arrest, confirmed by the Department of Money Laundering Investigation, comes as authorities intensify their probe into financial transactions linked to the group and its associates. Officials have not disclosed where Agrawal was taken into custody.

Agrawal, who heads Jagdamba Holdings under the Shanker Group, is now among several individuals under investigation as authorities examine alleged irregularities tied to business operations and investments.

The development follows a broader investigation triggered by the arrest of businessman Deepak Bhatta, whose financial and political links with the Shanker Group are now central to the case. Chairman Shanker Lal Agrawal has already been detained, while police are also searching for his other son, Sahil.

Authorities say the probe could have far-reaching implications, with more than 40 companies under the group potentially affected. The conglomerate, which reports annual turnover exceeding Rs125 billion, employs over 15,000 people and has significant exposure to the banking sector, with loans estimated at around Rs200 billion.

Founded in 1935, the Shanker Group grew from a textile trading business in Kathmandu into a major industrial house spanning steel, cement, insurance, hydropower and trading sectors. Its flagship, Jagdamba Steels, remains a dominant player in Nepal’s rebar market, accounting for a significant share of national production.

Investigators are also examining the group’s financial ties with Bhatta, including transactions flagged by Nepal Rastra Bank’s Financial Intelligence Unit between 2020 and 2022. Some of these transactions reportedly flowed into investments in Himalayan Reinsurance, a company jointly backed by the group and Bhatta.

Officials say the case, which had earlier stalled, was revived after the formation of a new government, reopening scrutiny into previously closed files and expanding the scope of the investigation into both Bhatta and the Shanker Group.