New Delhi: The Enforcement Directorate (ED) has arrested Punit Garg, former president and director of Reliance Communications Ltd (RCOM), in connection with an alleged ₹40,000 crore bank loan fraud involving companies within the Anil Ambani-led Reliance group, officials said. Garg was remanded to nine days of ED custody by a special Prevention of Money Laundering Act (PMLA) court in Delhi on Friday as the federal investigation into bank loan diversion and alleged money-laundering gathered pace.
Garg, 61, held several senior roles at RCOM over two decades, including president of Global Enterprise Business and president (Regulatory Affairs). He also served as executive director and later as non-executive director until April 2025, according to ED filings.
The agency’s investigation is rooted in a Central Bureau of Investigation (CBI) FIR registered in August 2025, which alleged offences including criminal conspiracy, criminal breach of trust and cheating, alongside provisions of the Prevention of Corruption Act in relation to bank loans extended to RCOM and its group companies over multiple years.
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Probe into alleged diversion and laundering of bank funds
The ED has alleged that Garg played an active role in acquiring, concealing, layering and disposing of the “proceeds of crime” generated through the alleged bank loan fraud, through a network that involved offshore entities and foreign subsidiaries of RCOM.
According to the probe agency, funds originating from loans availed by RCOM and related entities from a consortium of Indian banks were diverted in violation of sanction terms and routed through multiple foreign companies before being repatriated to India. A portion of the proceeds was reportedly used for personal expenses, including overseas education costs for Garg’s children, ED claimed.
Investigators flagged one notable transaction in which proceeds were used to acquire a luxury condominium in Manhattan, New York. The property was later sold in 2023 during RCOM’s Corporate Insolvency Resolution Process (CIRP), and the sale proceeds of USD 8.3 million (approximately ₹70 crore at the time) were remitted to India via what the agency described as a sham investment arrangement involving a Dubai-based entity, alleged to be under the control of a foreign individual with Pakistan links.
Attachment of assets, scrutiny of financial flows
Prior to Garg’s arrest, the ED had taken action to provisionally attach shares and mutual funds registered in the name of his spouse, as part of efforts to prevent dissipation of alleged proceeds of crime.
This move aligns with broader enforcement action in the case, including provisional attachment of assets linked to various Reliance group companies worth over ₹1,800 crore in recent weeks. ED statements and earlier filings indicate cumulative attachments linked to related proceedings now run into thousands of crores, as the agency intensifies scrutiny of alleged public fund diversion and money-laundering.
Allegations span years of financial transactions
The CBI FIR alleges that from April 2013 to March 2017, RCOM and its group entities availed credit facilities from multiple public and private sector lenders, including State Bank of India, Bank of Baroda, Punjab National Bank, Canara Bank, IDBI Bank, Central Bank of India, Indian Overseas Bank, UCO Bank, and others, alongside foreign lenders. Investigators say that despite significant borrowing, loans were misused and funds siphoned off contrary to lending terms.
No official statement has been issued by the Reliance Group regarding Garg’s arrest or the ongoing investigations.
Next steps and expected developments
With Garg in ED custody, investigators are expected to interrogate him on the structure of alleged fund diversion, the role of foreign subsidiaries and intermediary entities, and linkages with additional individuals and corporate structures. The ED is also examining complex financial flows to identify additional beneficiaries and front companies allegedly used in the laundering process.
Further arrests and attachments of property and financial instruments are likely as the investigation progresses and forensic analysis of evidence continues.
