New Delhi, Jan 30 (IANS) The Directorate of Enforcement (ED) has arrested Punit Garg, ex-Director of Reliance Communications (RCOM) Ltd, under the Prevention of Money Laundering Act (PMLA) in the over Rs 40,000 crore bank fraud and money laundering case, an agency statement said on Friday.

The probe shows Garg diverted proceeds of crime to offshore entities and used these proceeds of crime for financing the overseas education of his children. He also fraudulently sold an $8.3 million luxury condo in Manhattan, New York and siphoned the sale proceeds to a Dubai-based entity, the statement said.

The Special Court for PMLA cases at Rouse Avenue in Delhi has granted ED nine days’ custody of Garg for interrogation in the case while the investigation continues, according to the statement.

Garg held several key positions in Reliance Communications over nearly two decades. He served as President, handling the company’s Global Enterprise Business between 2006 and 2013, and later as President (Regulatory Affairs) from 2014 to 2017.

In October 2017, he was appointed Executive Director of RCOM, and subsequently served as a non-Executive Director from April 2019 until April 2025.

The ED alleged that Garg played an active role in the acquisition, possession, concealment, layering, and dissipation of the “Proceeds of Crime” generated through the alleged bank fraud.

While holding senior managerial and directorial roles between 2001 and 2025, Garg was involved in diverting funds through multiple foreign subsidiaries and offshore entities linked to RCOM, it said.

One of the key findings of the probe relates to the alleged diversion of proceeds for the purchase of a luxury condominium flat in Manhattan.

The ED stated that this property was later sold during the Corporate Insolvency Resolution Process (CIRP) of RCOM, allegedly through fraudulent means.

The financial probe agency claimed that the sale proceeds, amounting to $8.3 million, were remitted from the US under the guise of a “sham investment arrangement” involving a Dubai-based entity. The ED further alleged that the entity was controlled by a Pakistan-linked individual, and that the remittance was made without the knowledge or consent of the Resolution Professional overseeing the insolvency process.

Investigators also found that part of the diverted loan funds — described as public money borrowed by RCOM from banks — was used for Garg’s personal expenditures, the ED statement further alleged.

–IANS

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