ED steps up action against alleged irregularities in proceedings under bankruptcy code

The Enforcement Directorate (ED) has intensified its action against the irregularities in the proceedings under the Insolvency and Bankruptcy Code (IBC), carrying out arrests, searches, and facilitating restitution of attached properties to banks and homebuyers in multiple cases involving alleged fraud and money-laundering.

Earlier this month, the agency arrested Arvind Kumar, who worked as a Resolution Professional of Richa Industries Limited from December 2018 to June 2025. In the same case, pertaining to an alleged loss of ₹236 crore to public sector banks, former promoter and suspended managing director of the company, Sandeep Gupta, was also arrested previously.

The agency alleged that during Mr. Kumar’s tenure as Resolution Professional, substantial funds from Richa Industries Limited were diverted to those closely linked to him. “Bank records further show unexplained cash deposits exceeding ₹80 lakh in his personal accounts, along with credits of over ₹1 crore received from his related parties who had earlier been beneficiaries of payments from the company,” the agency said.

The accused helped set up a manipulated Committee of Creditors, handing decisive voting power to the former promoters. The purported acts of the Resolution Professional in orchestrating a “pro-promoter” conspiracy resulted in a “staggering 94% loss (haircut) to public sector banks”. After liquidation of Richa Industries Limited, banks received ₹40 crore against admitted claims of ₹708 crore, the agency said. Mr. Kumar’s registration as Resolution Professional was suspended by the Insolvency and Bankruptcy Board of India for two years for the related alleged contraventions.

In a separate case, on February 3, following the ED’s intervention, the National Company Law Tribunal recalled the Corporate Insolvency Resolution Process (CIRP) in the Alchemist Group matter for alleged misuse of the process to launder the proceeds of crime. It held that the insolvency proceedings were vitiated by fraud, collusion, and malicious intent.

It is alleged that Alchemist Holdings Limited and Alchemist Township India Limited had collected over ₹1,840 crore from investors on the pretext of offering high returns, plots, villas, and flats. The ED had earlier provisionally attached assets worth ₹492.72 crore in the case. According to the agency, the Committee of Creditors constituted during the CIRP was “dominated almost entirely by Alchemist Group entities”.

In December 2025, the agency carried out searches in matters allegedly involving Angle Infrastructure Private Limited, the Resolution Professional, and Nauseva Buildwell LLP and its partners, based on evidence of possible collusion during the CIRP of the corporate debtor. Investigation is also underway into the alleged defrauding of a public sector bank, and minimal recovery effected through the sale of two acres of land for ₹31 crore, sold through a Memorandum of Understanding before the CIRP process, against a valuation of ₹160 crore during the CIRP.

The agency also gathered evidence of alleged collusion to coerce homebuyers to withdraw complaints filed before the police as a pre-condition for resolution.

In another case, allegedly against Universal Buildwell Private Limited and others, the ED conducted searches in November 2025 in connection with an “undervalued” sale of land through the purported misuse of the IBC process. The operation included middlemen not part of the insolvency process, the Resolution Professional, advocates of the National Company Law Tribunal, and RDB Infrastructure and Power Limited, the buyer of the property.

The agency also helped restore the unsold inventory of 354 flats, 17 commercial units and two plots in Project Royal Rajvilas at Udaipur, with a present market value of about ₹175 crore, to the successful resolution applicant of Udaipur Entertainment World Private Limited appointed under the IBC, benefiting genuine homebuyers. “The present restitution brings an end to the plight of 213 innocent homebuyers who had been suffering for over 12 years and it has paved the way for completion of the project,” the agency said.

In yet another case, the agency facilitated restoration of assets worth ₹952 crore to rightful claimants through a court directive dated June 25, 2025. The case, registered under the Prevention of Money Laundering Act, was allegedly against Infrastructure Leasing & Financial Services Limited (IL&FS), its group companies, and associated entities. The ED found that Vadraj Cement Limited had received ₹952 crore financial assistance from IL&FS Financial Services Limited, later declared a non-performing asset, after which is assets were attached.