New Delhi: Continuing its drive against bankrupt companies for alleged fraudulent corporate resolutions and money laundering in insolvency proceedings, the National Company Law Tribunal (NCLT) on Thursday arrested former resolution professional (RP) Arvind Kumar of Richa Industries Ltd.Kumar, who served as the company’s RP from 2018 to 2025, was the first RP ever arrested by law enforcement agencies on charges of colluding with promoters of bankrupt companies, siphoning off assets of bankrupt companies and laundering proceeds of crime. The court has remanded him to custody and given ED custody for eight days.In January, ED arrested Sandeep Gupta, a former promoter of the company. The agency then claimed that Gupta not only defrauded banks of billions of rupees but also allegedly laundered money by transferring valuable assets of the company into shell entities issued by him and his associates when the company went bankrupt.Kumar’s arrest comes two days after the NCLT’s Delhi bench quashed the insolvency resolution award against Alchemist Ltd after the ED presented evidence of fraud against the company’s resolution in which a sister company of the company was included in the committee of creditors (CoC) with 97 per cent voting rights for fraudulent acquisition of assets.In the Richa Industries case, the corporate insolvency resolution process initiated in 2018 stalled without an approved resolution, leading to the NCLT ordering liquidation on June 11 last year. The ED said it appointed a liquidator and reaped a gain of Rs 40 crore from the sale of Richa Industries to Indian Overseas Bank and Union Bank, while the claims admitted by the two banks were Rs 696 crore, a reduction of about 94 per cent.According to ED’s investigative report, “(Kumar’s) bank records further revealed that during his tenure, he had unexplained cash deposits of over Rs 80 lakh in his personal accounts and over Rs 1 crore of credit received from his associates who were earlier beneficiaries of payments made by the company.”“The arrested RP was a beneficiary of the proceeds of crime arising from the initial bank fraud, using the illicit funds as legitimate income under the guise of CIRP-related business,” the agency said.According to the ED, RP adopted a modus operandi, allegedly adopted in many other NCLT resolution cases, wherein the constitution of the CoC was “manipulated by admitting false and exaggerated claims of unsecured financial creditors, many of whom were fictitious/agents controlled by former promoters who masterminded bank fraud, thereby handing decisive voting power to suspended promoters and marginalizing genuine public sector bank creditors”.
