The Directorate of Enforcement, Gurugram Zonal Office, has arrested Arvind Kumar, former Resolution Professional of M/s Richa Industries Limited, in connection with a major bank fraud and money laundering case involving public sector banks. The alleged fraud amounts to ₹236 crore and relates to the period from 2015 to 2018, according to an official ED press release.
Arrest and Court Proceedings
Arvind Kumar, who served as Resolution Professional of Richa Industries Limited from December 2018 to June 2025, was arrested under the Prevention of Money Laundering Act, 2002, on 03 February 2026. He was produced before the Hon’ble Special Court, Gurugram, which granted eight days of ED custody for further investigation.
Earlier, the Enforcement Directorate had arrested Sandeep Gupta, the ex‑Promoter and suspended Managing Director of Richa Industries Limited, under Section 19 of the PMLA.
Background of the Case
The ED initiated its probe based on a First Information Report registered by the Central Bureau of Investigation under various provisions of the Indian Penal Code, 1860, and the Prevention of Corruption Act, 1988. The allegations include criminal conspiracy, cheating, and criminal misconduct, which caused wrongful gains to the accused and substantial losses to public sector banks.
The fraud is stated to have occurred between 2015 and 2018, prior to the initiation of insolvency proceedings against the company.
Financial Impact on Banks
The bank fraud under investigation is valued at ₹236 crore. Following the liquidation of Richa Industries Limited, banks recovered only ₹40 crore against admitted claims of ₹708 crore. This resulted in a 94 percent haircut for public sector lenders, highlighting the severe financial impact of the alleged misconduct.
Alleged Personal Enrichment
The ED’s investigation revealed that Arvind Kumar allegedly benefited personally during his tenure as Resolution Professional. Substantial funds of Richa Industries Limited were diverted through layered transactions to associates and entities linked to his business interests.
Bank records showed unexplained cash deposits exceeding ₹80 lakh in his personal accounts, along with credits of more than ₹1 crore from related parties who had earlier received funds from the company. The ED stated that these amounts represented proceeds of crime and were projected as legitimate receipts under the guise of insolvency-related operations.
Misuse of the Insolvency Process
According to the ED, the insolvency framework was deliberately misused to benefit the suspended promoters. The Resolution Professional is accused of manipulating the Committee of Creditors by admitting sham and inflated claims of unsecured financial creditors, many of whom were allegedly proxy entities controlled by the ex‑promoters. This shifted voting control away from genuine public sector bank creditors.
Despite the company being under CIRP, crores of rupees were allegedly siphoned off through contracts, remuneration, and operational payments to entities linked to the suspended directors. The ED also alleged collusion in allowing promoters to retain operational control over key assets and projects.
Further, the Resolution Professional allegedly failed to file avoidance applications under the Insolvency and Bankruptcy Code despite audit findings pointing to preferential, undervalued, and fraudulent transactions. Ineligible resolution plans submitted by promoter‑linked entities were also forwarded in violation of Section 29A of the IBC.
Legal Position and Ongoing Probe
The ED concluded that Arvind Kumar played a deliberate and active role in money laundering under Section 3 of the PMLA, punishable under Section 4 of the Act. His registration as a Resolution Professional had earlier been suspended for two years by the Insolvency and Bankruptcy Board of India for related violations.
Further investigation is ongoing to trace the full flow of funds and identify all persons involved. The ED has emphasized that such cases undermine creditor recovery and weaken confidence in India’s insolvency and financial systems.
Source:
ED Press Release dated 05/02/2026: Former Resolution Professional Arrested in Rs 236 Cr Richa Industries Bank Fraud Case