The Enforcement Directorate (ED) has arrested Punit Garg, former Director of Reliance Communications Ltd (RCOM), under the Prevention of Money Laundering Act (PMLA), 2002, in connection with an alleged ₹40,000-crore bank fraud and money laundering case linked to the debt-laden telecom company, officials said on Thursday.
Garg was arrested by the ED’s Special Task Force on January 29, 2026, following an ongoing investigation into alleged diversion and laundering of proceeds of crime generated by RCOM and its group entities.
Case Linked to CBI FIR and IPC, PC Act Charges
The ED probe is based on a CBI FIR dated August 21, 2025, registered under Sections 120-B, 406 and 420 of the Indian Penal Code, along with provisions of the Prevention of Corruption Act, 1989, officials said.
According to the agency, the case pertains to large-scale bank fraud involving loans availed by RCOM, which subsequently turned into non-performing assets.
Alleged Diversion of Funds Through Offshore Entities
The ED alleged that Garg, who held senior managerial and directorial positions in RCOM between 2001 and 2025, was actively involved in the acquisition, possession, concealment, layering and dissipation of proceeds of crime.
Investigators found that part of the alleged proceeds were diverted through multiple foreign subsidiaries and offshore entities of RCOM. The agency further claimed that illicit funds were used for personal expenses, including overseas education-related payments for Garg’s children.
Manhattan Property Sale Under Scanner
In a key finding, the ED said proceeds of crime were used to purchase a luxury condominium apartment in Manhattan, New York, which was later sold for $8.3 million during RCOM’s Corporate Insolvency Resolution Process (CIRP).
According to the agency, the sale was carried out fraudulently, without the knowledge or consent of the Resolution Professional, and the sale proceeds were allegedly remitted from the United States under the guise of a sham investment arrangement to a Dubai-based entity controlled by a Pakistan-linked individual.
Court Grants Custodial Remand
Garg was produced before the Special PMLA Court at Rouse Avenue, New Delhi, which granted the ED nine days of custodial remand to enable further investigation, including tracing remaining proceeds of crime, identifying other beneficiaries, and reconstructing the money-laundering trail.
The investigation is ongoing.
