ED arrests ex-RCom president in ₹40,000cr bank fraud case
What's the story
The Enforcement Directorate (ED) has arrested Punit Garg, a former Director and ex-President of Reliance Communications Limited (RCOM), in a bank fraud and money laundering case worth over ₹40,000 crore. The arrest was made under the Prevention of Money Laundering Act (PMLA), 2002. The investigation was launched after a Central Bureau of Investigation (CBI) FIR was registered on August 21, 2025.
Allegations
Allegations of money laundering and fund diversion
The ED has accused Garg of being an active participant in the acquisition, possession, concealment, layering, and dissipation of "Proceeds of Crime" from the alleged bank fraud. The agency claims that during his tenure, he was involved in diverting funds through several foreign subsidiaries and offshore entities linked to RCOM. One major finding is the alleged diversion of proceeds for buying a luxury flat in Manhattan, New York.
Fraudulent transactions
Fraudulent sale of Manhattan property during insolvency proceedings
The ED claims that the Manhattan property was sold during RCOM's Corporate Insolvency Resolution Process (CIRP) through fraudulent means. The sale proceeds of $8.3 million were sent from the US under a "sham investment arrangement" with a Dubai-based entity controlled by a Pakistan-linked individual, without the knowledge or consent of the Resolution Professional overseeing insolvency proceedings.
Personal expenditures
Personal expenses and overseas education payments
The ED also found that some of the diverted loan funds, public money borrowed by RCOM from banks, were allegedly used for Garg's personal expenses. These included payments related to his children's overseas education, the agency said. After his arrest, Garg was presented before a Special Court under the PMLA at Rouse Avenue Courts in New Delhi.
Custodial remand
Court grants ED 9-day custodial remand for further interrogation
The court has granted the ED nine days of custodial remand for further interrogation. The agency said this remand is necessary to trace the remaining proceeds of crime, identify other beneficiaries, and uncover the complete money laundering trail linked to the alleged fraud. The investigation into the RCOM-linked bank fraud and overseas diversion of funds is still ongoing.