Former Reliance Communications Executive Arrested in Rs 40,000 Crore Money Laundering Case
Indian authorities have arrested Punit Garg, former executive director of Reliance Communications (RCOM), in connection with a massive bank fraud and money laundering investigation exceeding Rs 40,000 crore ($5.3 billion). The Directorate of Enforcement (ED) alleges that Garg, who held senior positions at the telecommunications giant for over two decades, diverted proceeds of crime through offshore entities and used funds for personal expenditures including his children's overseas education.
Background and Context
The case stems from alleged fraudulent activities at Reliance Communications, once part of India's largest business conglomerate. According to the ED's investigation, public funds borrowed by RCOM from various Indian banks were siphoned through complex international transactions. The alleged fraud amounts to one of India's largest banking scandals, raising questions about corporate governance and regulatory oversight in the country's telecommunications sector.
Key Figures and Entities
Punit Garg served in multiple leadership roles at RCOM between 2001 and 2025, including President of Global Enterprise Business (2006-2013), President of Regulatory Affairs (2014-2017), Executive Director (2017-2019), and finally as non-Executive Director until April 2025. According to the ED's statement, Garg played an active role in acquiring, possessing, concealing, layering, and dissipating proceeds of crime generated through alleged bank fraud. The investigation identifies several offshore entities through which funds were allegedly diverted, including a Dubai-based entity reportedly controlled by a Pakistan-linked individual.
Legal and Financial Mechanisms
The investigation reveals sophisticated money laundering techniques allegedly employed to conceal the origin and movement of funds. According to the ED, Garg diverted proceeds through multiple foreign subsidiaries and offshore entities linked to RCOM. A key finding involves the alleged fraudulent sale of a $8.3 million luxury condominium in Manhattan during RCOM's Corporate Insolvency Resolution Process (CIRP). Authorities claim the sale proceeds were remitted from the US under the guise of a "sham investment arrangement" to a Dubai-based entity, without the knowledge of the insolvency Resolution Professional. The ED also alleges that diverted loan funds financed personal expenditures, including overseas education costs for Garg's children.
International Implications and Policy Response
The case highlights significant challenges in cross-border financial crime enforcement and corporate insolvency proceedings. The alleged movement of funds through multiple jurisdictions—including the US, Dubai, and entities with Pakistan connections—underscores the complexity of tracking illicit financial flows in an increasingly globalized economy. India's enforcement agencies continue to strengthen their international cooperation mechanisms to address such sophisticated financial crimes, though this case reveals persistent gaps in monitoring cross-border transactions during corporate restructuring processes.
Sources
This report draws on the official statement from India's Directorate of Enforcement, court documents from the Special Court for PMLA cases at Rouse Avenue in Delhi, and publicly available information about Reliance Communications' corporate structure and leadership history.
