India Agency Files Charges in ₹40,000 Crore Fraud Case Involving Offshore Entities

India’s federal financial crime agency is poised to file a prosecution complaint alleging money laundering in a ₹40,000 crore loan fraud case linked to the Reliance Group. The upcoming charges, expected to be filed under the Prevention of Money Laundering Act, target former executives of Reliance Communications (RCOM), accusing them of orchestrating complex financial diversions through a network of offshore entities.

Background and Context

The investigation stems from a broader probe into alleged financial irregularities within conglomerate companies associated with Reliance Group chairman Anil Ambani. Following a directive from the Supreme Court of India, the Enforcement Directorate (ED) constituted a Special Investigation Team (SIT) to examine these matters. This latest development focuses on loans procured by RCOM, which investigators claim were obtained via fraudulent means and subsequently siphoned off. The agency has previously filed charges in related matters, including a separate case involving an alleged fake bank guarantee worth ₹68 crore filed in December 2025 against Reliance Power Ltd.

Key Figures and Entities

The prosecution complaint is expected to name Punit Garg, the former president of RCOM, as a primary accused. According to official sources, Garg, 61, was arrested by the ED in January following allegations of his central role in the scandal. Investigators claim that during his tenure from 2001 to 2025, he held senior managerial and directorial positions that allowed him to oversee the movement of funds. While the investigation involves entities tied to the wider corporate group, the immediate filing focuses on the specific actions of the telecommunications firm and its leadership.

Legal and Financial Mechanisms

The complaint will be filed under the strict provisions of the Prevention of Money Laundering Act (PMLA), which criminalizes the process of layering and concealing illicit wealth. Investigators allege that the proceeds of crime were moved through a sophisticated web of financial transactions designed to obscure their origin. The ED claims that funds derived from the alleged bank fraud were diverted through multiple foreign subsidiaries and offshore entities associated with RCOM, effectively shielding them from regulatory scrutiny.

International Implications and Policy Response

The alleged use of offshore intermediaries to move vast sums of capital underscores the persistent challenges in regulating cross-border financial flows. The establishment of the SIT by the Supreme Court signals a judicial response to systemic gaps in oversight regarding corporate lending and the utilization of foreign subsidiaries to manage liabilities. As the legal proceedings advance, the case may prompt closer scrutiny of how multinational groups structure their international operations to facilitate the movement of assets.

Sources

This report draws on official statements from the Enforcement Directorate and news reporting published by Business Standard.