NEW DELHI: A former resolution professional has been arrested by the ED under the Anti-Money Laundering Act for allegedly abusing insolvency and insolvency frameworks that led to losses of crores of rupees to public sector banks, the federal probe agency said.
ED arrests insolvency resolution professional on charges of money launderingArvind Kumar, RP of a company under bankruptcy called Richa Industries Limited, was taken into custody on February 3. A special Money Laundering Act court in Gurugram sent him to 8-day custody, the Enforcement Directorate said in a statement issued on Thursday.
It said the Insolvency and Bankruptcy Board of India had recently suspended RP’s registration for two years for “related” violations.
An RP is appointed to manage the insolvency resolution process and conduct negotiations between the company’s creditors and creditors under the corporate insolvency and resolution process.
The case relates to an alleged bank fraud ₹236 crore by the accused company and its promoters between 2015 and 2018. The company later went bankrupt and Kumar served as its RP between December 2018-June 2025.
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The ED alleged that Kumar made “personal enrichment” through his “direct and active” involvement in money laundering.
“During his tenure as a resolution professional, substantial funds from Richa Industries were channeled through layered transactions to individuals and entities closely connected to him, including associates and employees associated with his own business interests.
“Large payments were made from the accounts of corporate debtors to these intermediaries, who then transferred substantial amounts to the personal bank accounts of Arvind Kumar,” the ED said.
Bank records show more than “unexplained” cash deposits ₹80 lakhs in Kumar’s personal account at the time of his appointment, along with more credit ₹1 crore received from its related parties who were earlier beneficiaries of payments from the company, the company added.
“The above findings reveal that the arrested RP was a beneficiary of the proceeds of crime arising from the original bank fraud, disguising illegal funds as legitimate receipts for CIRP-related operations,” it claimed.
It said that a “pro-promoter” conspiracy by RP caused banks to lose 94 percent of what they only received. ₹40 crore has been claimed against the claim ₹708 crores after dissolution of the company.
“Such alleged misuse of the wall framework not only defeats the objectives of creditor recovery and corporate revival but also undermines public confidence in the financial and insolvency system.
“Investigation is on to trace the complete flow of funds and identify all the parties involved,” the ED said.
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