In a significant development that casts a shadow on the integrity of India's insolvency resolution framework, the Enforcement Directorate (ED) has arrested Arvind Kumar, the former Resolution Professional (RP) of Richa Industries Limited. This marks the first instance of a resolution professional being apprehended by the ED for allegedly colluding with the promoters of a bankrupt company. Kumar faces charges of money laundering under the Prevention of Money Laundering Act (PMLA), with allegations suggesting that the Corporate Insolvency Resolution Process (CIRP) was manipulated to favor the company's former promoters and cause substantial losses to public sector banks. He has been remanded to eight days of ED custody.
Arvind Kumar served as the Resolution Professional for Richa Industries from December 2018 to June 2025. During this period, the ED alleges that significant company funds were illicitly diverted to individuals and entities closely associated with him. Investigators claim that these funds were routed through intermediaries before eventually being transferred back into Kumar's personal bank accounts, effectively making him a direct beneficiary of the alleged crime.
The ED's investigation has uncovered suspicious banking transactions, including unexplained cash deposits exceeding ₹80 lakh in Kumar's personal accounts. Furthermore, credits of over ₹1 crore were traced to related parties who had previously received payments from Richa Industries. The agency asserts that these transactions lack correlation with legitimate professional fees or declared income sources, suggesting a deliberate layering of corporate funds to conceal their origin and misrepresent them as CIRP-related expenses.
The ED has also accused Kumar of violating provisions of the Insolvency and Bankruptcy Code (IBC) by deliberately failing to file mandatory avoidance applications, despite audit reports highlighting preferential, undervalued, fraudulent, and extortionate transactions. According to the ED, Kumar allegedly colluded with the former promoters of Richa Industries in a "pro-promoter" conspiracy. It is alleged that he forwarded ineligible resolution plans submitted by entities controlled by the promoter family and collected crores of rupees from interested parties on the pretext of selling company assets, without authorization or proper documentation. The agency said these actions directly contributed to massive losses for lenders. Following the liquidation of Richa Industries, banks reportedly recovered only ₹40 crore against admitted claims of ₹708 crore, translating into a 94% haircut.
The Insolvency and Bankruptcy Board of India (IBBI) had previously suspended Arvind Kumar's registration as a Resolution Professional for two years in light of the alleged misconduct. The ED has stated that the evidence gathered thus far is substantial and further investigation could lead to additional disclosures. The matter is currently before the court, and the investigation remains ongoing.
In a separate case, the National Company Law Tribunal (NCLT) on February 3, 2026, withdrew its corporate resolution order awarding Alchemist Ltd to a related group entity, observing that the “insolvency proceedings were vitiated by fraud, collusion and malicious intent”. The ED had approached the Delhi bench with evidence of money laundering by the group.
These cases highlight the critical need for accountability, oversight, and transparency within India's insolvency resolution mechanism.