ED Arrests Ex-Promoter of Richa Industries in ₹236-crore Bank Fraud Case

Background

The Directorate of Enforcement (ED) has arrested Sandeep Gupta, former promoter and suspended Managing Director of Richa Industries Limited, in connection with an alleged ₹236-crore bank fraud. The arrest was made on January 20, 2026, under the Prevention of Money Laundering Act, 2002, following an investigation initiated on the basis of a CBI FIR. The case relates to alleged criminal conspiracy, cheating and criminal misconduct between 2015 and 2018, which, according to the ED, resulted in substantial losses to public sector banks. The agency has claimed that the company recorded fictitious sales and bogus purchases to inflate turnover and misrepresent its financial position.

Alleged diversion during the insolvency process

The ED has alleged that funds were siphoned off through related-party transactions and shell entities, including diversion of money during the Corporate Insolvency Resolution Process (CIRP). Richa Industries entered CIRP in December 2018, and the National Company Law Tribunal ordered its liquidation on June 11, 2025. According to the agency, corporate guarantees exceeding ₹232 crore were issued shortly before the commencement of CIRP to entities holding voting rights in the Committee of Creditors, allegedly enabling obstruction of the resolution process. Gupta was produced before a special court in Gurugram, which granted the ED eight days’ custody. Further investigation is ongoing.