How Punit Garg Allegedly Diverted Rs. 40,000 Crore: The Case Against the Former RCOM President

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The Enforcement Directorate (ED) has arrested Punit Garg, the former President of Reliance Communications (RCOM). He is accused of playing a major role in a Rs. 40,000 crore bank loan fraud.


The arrest took place on 29 January 2026, as part of a massive money laundering investigation. This case involves the business group led by Anil Ambani. Investigators say Garg used complex offshore companies to hide public money for personal gain.

Inside the Rs. 40,000 Crore Fraud

Punit Garg worked at RCOM in high-level roles from 2001 until 2025. Investigators claim he was the mastermind who moved illegal funds through many different layers. This fraud was not just about failing to pay back loans. Instead, the ED says Garg moved bank money through several foreign branch offices to hide its origin.

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One major piece of evidence involves a luxury apartment in Manhattan, New York. The ED states that this property was purchased with stolen money. It was later sold for $8.3 million while RCOM was going through bankruptcy. The sale was conducted in secret without the permission of the company's legal officers in charge. The money then traveled through a Dubai company linked to a Pakistani citizen to keep it out of reach of Indian banks.

What the Punit Garg Arrest Means for RCOM’s Unpaid Creditors

Despite the arrest, a bigger question lies ahead: what happens to the banks and small investors who are still owed money? The arrest of a top leader like Garg makes the RCOM Rs. 40,000 crore bank loan fraud case much more difficult for everyone involved.

A major problem is that assets like the Manhattan apartment were sold illegally, leaving no money for RCOM  to pay back to the people.

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For the nine banks involved, this arrest is a double-edged sword:

Asset Recovery: The ED has already attached assets worth Rs. 12,000 crore across the group, which could eventually be used to settle dues.
Legal Delays: Criminal proceedings often slow down the insolvency process, meaning creditors might have to wait even longer for a final resolution.

The arrest of Punit Garg is a warning to all corporate leaders in India. It shows that bankruptcy will not hide criminal actions or the theft of assets. Over the next six months, the ED will likely seize more property in an attempt to find the missing $8.3 million.