ED Arrests Former RCom Director Punit Garg in ₹1,190 Crore Bank Fraud and Money Laundering Case

The Enforcement Directorate has arrested Punit Garg, former Director of Reliance Communications (RCom), in connection with a ₹1,190 crore bank fraud and money laundering case, marking a major escalation in the long-running probe into one of India’s largest corporate loan default scandals.

The arrest was made on January 20, 2026, by the ED’s Special Task Force under the Prevention of Money Laundering Act (PMLA), 2002, following extensive investigation into the alleged diversion and laundering of public funds borrowed by RCom from banks and financial institutions.

CBI FIR Formed the Basis of ED Probe

The ED case is rooted in a CBI FIR dated September 21, 2025 (RC No. R87/2025/9005), registered under Sections 120-B, 406 and 420 of the IPC, along with Sections 13(1)(d) and 13(2) of the Prevention of Corruption Act.

According to investigators, the FIR pertains to criminal conspiracy, cheating, breach of trust and corruption in relation to massive loan defaults and alleged siphoning of bank funds by RCom and its associated entities.

Senior Managerial Roles at RCom

ED findings show that Punit Garg held strategic leadership and board-level roles at RCom for nearly 25 years (2000–2025), giving him significant control over decision-making and fund movement.

His key positions included:

• Head of Global Enterprise Business (2000–2013)

• Chairman – Regulatory Affairs (2014–2017)

• Executive Director (October 2017)

• Non-Executive Director (April 2018 – April 2025)

The agency alleges that Garg used these positions to facilitate and conceal the movement of illicit funds.

Active Role in Laundering of Proceeds of Crime

The ED claims that Garg was directly involved in the acquisition, concealment, layering and diversion of proceeds of crime generated from the alleged banking fraud.

Investigators traced multiple transactions through overseas subsidiaries and offshore entities linked to RCom, which were allegedly used to route public funds out of India and disguise their origin.

Cases like this underline how weak internal controls, opaque fund routing and poor financial documentation enable large-scale fraud-making structured accounting discipline and transparent bookkeeping services in india critical for early detection of irregularities.

Luxury Property Purchased in New York

One of the most serious allegations involves the purchase of a luxury condominium apartment in Manhattan, New York, using laundered funds routed through foreign entities.

During RCom’s Corporate Insolvency Resolution Process (CIRP), Garg allegedly fraudulently sold the property without the knowledge or consent of the Resolution Professional. The sale fetched approximately USD 5.3 million, which the ED says was further laundered.

Funds Routed via Dubai Entity

The agency alleges that the sale proceeds were transferred from the United States to a Dubai-based entity, under the guise of a sham investment structure. This entity was allegedly controlled by a Pakistan-linked individual, raising red flags around cross-border layering and national security sensitivities.

Public Funds Used for Personal Expenses

Further investigation revealed that part of the diverted bank funds was allegedly used for personal expenditure, including overseas education expenses of Garg’s children.

The ED has stated that this amounts to misappropriation of public money, as the original funds were sourced from loans extended by Indian banks and financial institutions.

Produced Before PMLA Court

After his arrest, Garg was produced before the Special PMLA Court at Rouse Avenue, New Delhi, which granted ED custody for further interrogation.

The agency informed the court that custodial interrogation was necessary to:

• Trace remaining proceeds of crime

• Identify other beneficiaries

• Uncover the full laundering network

Further Investigation Underway

The ED has confirmed that the probe is ongoing, with additional attachments, arrests and prosecution likely as more evidence surfaces. Officials indicated that the case could widen to include other executives, intermediaries and overseas entities involved in fund diversion.