Former RCOM Director Arrested in Massive Rs 40,000 Crore Bank Fraud Case
The Enforcement Directorate (ED) has made a significant arrest in one of India's largest financial fraud cases, apprehending former Reliance Communications Limited (RCOM) director Punit Garg on charges of money laundering connected to an alleged Rs 40,000-crore bank fraud by the telecom company and its group entities.
Details of the Arrest and Legal Proceedings
Garg was arrested on Thursday evening and produced before the special Prevention of Money Laundering Act (PMLA) court at Rouse Avenue Courts on Friday. The court has remanded him to nine-day ED custody to facilitate further investigation into tracing the remaining proceeds of crime, identifying other beneficiaries, and uncovering the complete money-laundering trail.
The arrest follows a Central Bureau of Investigation (CBI) First Information Report (FIR) registered on August 21, which alleges offences under multiple sections of the Indian Penal Code including:
- Section 120-B (criminal conspiracy)
- Section 406 (criminal breach of trust)
- Section 420 (cheating)
The case also involves provisions of the Prevention of Corruption Act, indicating the serious nature of the allegations against the accused.
Garg's Role and Involvement in RCOM
According to an ED spokesperson, Punit Garg held various senior positions at RCOM over an extended period from 2001 to 2025. His career trajectory within the company included:
- Serving as President of RCOM, handling the Global Enterprise Business from 2006 to 2013
- Working as President (Regulatory Affairs) from 2014 to 2017
- Being appointed as Executive Director of RCOM in October 2017
- Serving as non-Executive Director from April 2019 until April 2025
The ED investigation has revealed that during his tenure in these senior managerial and directorial positions, Garg was actively involved in the acquisition, possession, concealment, layering and dissipation of Proceeds of Crime generated from the bank fraud.
Complex Money Laundering Network Uncovered
Investigations have uncovered that proceeds of crime from the bank fraud were diverted through multiple foreign subsidiaries and offshore entities of RCOM. One particularly notable diversion involved the purchase of a luxury condominium apartment in Manhattan, New York, United States.
This property was allegedly sold during the Corporate Insolvency Resolution Process (CIRP) of RCOM fraudulently by Punit Garg, according to the ED spokesperson. The sale proceeds amounting to USD 8.3 million were then remitted from the United States under the guise of a sham investment arrangement with a Dubai-based entity controlled by a Pakistan-linked individual.
This transaction occurred without the knowledge or consent of the Resolution Professional, raising serious questions about the transparency and legality of the asset disposal during the insolvency proceedings.
Personal Misuse of Public Funds
The probe has further revealed that part of the proceeds of crime - which essentially constituted public money taken by RCOM as bank loans - was diverted for Garg's personal expenses. These included overseas education-related payments for his children, indicating a direct personal benefit derived from the fraudulent activities.
The ED's action represents a significant development in the ongoing investigation into the massive bank fraud case that has rocked India's corporate and banking sectors. The case highlights the sophisticated methods employed to launder money and conceal the trail of illicit funds through international channels and complex corporate structures.
