ED arrests former Richa Industries promoter in bank fraud case

The Enforcement Directorate arrested Sandeep Gupta, former promoter and suspended managing director of Richa Industries Limited (RIL), and detained him for eight days for interrogation.

The accused was produced before a court in Gurugram and the court sent him to the ED. The case is based on the First Information Report registered by the Central Bureau of Investigation, which contains allegations of cheating and criminal conspiracy by the accused, who caused losses of ₹236 crore to public sector lending banks between 2015 and 2018.

According to the ED, Richa Industries had systematically recorded fictitious sales without any actual supply of goods, including cotton fabric sales of ₹ 7.42 crore and fabricated solar power-related sales worth ₹ 8.50 crore to multiple shell companies operated by various entry operators.

“Invoices and ledger entries relating to these transactions were found to be false and manipulated, and outstanding balances and inter-departmental transfers were used to conceal non-receipt of payments. These actions led to artificial turnover inflation and deliberate misrepresentation of the company’s financial position in order to mislead creditors and other stakeholders.”

Richa Industries allegedly made bogus purchases of Zero Liquid Discharge plants and machinery worth ₹ 9.23 crore from a non-operational entity whose business profile, Goods and Services Tax details and Harmonized System of Nomenclature codes were completely inconsistent with such supplies.

The agency also alleged that around Rs 16.40 billion was transferred to group entities under the garb of loan repayments between 2015-16 and 2017-18. In 2018-19, company funds were used to acquire majority stake in Richa Krishna Constructions Private Limited to divert a valuable Rohtak project during the Corporate Insolvency Resolution Process (CIRP). During the same period, Richa Infrastructure’s shares were transferred at “gross impairment”, causing RIL to incur financial losses.

Mr Gupta allegedly played a key role in diverting the corporate debtor’s assets just before the commencement of the CIRP. It also raised concerns about a number of fronts used to divert assets. An organization called Saariga Constructions Private Limited (SCPL) was formed using a former employee of Richa Industries.

“Through coordinated efforts, SCPL is said to have fraudulently secured voting rights in the Committee of Creditors (CoC) and enabled the Gupta family to obstruct and influence the CIRP in their favor… during the bankruptcy period, Sandeep Gupta and his family allegedly maintained illegal control over RIL’s operations, entered into agreements and received remuneration in flagrant violation of legal norms…” the agency said, referring to other alleged violations.

The CIRP failed to result in an approved resolution plan, leading the National Company Law Tribunal to order liquidation on 11 June 2025 and appoint a liquidator. Later, an e-auction was held on 16 October 2025 with a reserve price of ₹ 96 crore, where a consortium comprising Kaveri Industries and Narendra Kumar Srivastava emerged as the successful bidder.

“In the process, public sector banks such as IOB and Union Bank received ₹40.29 billion against accepted claims of ₹696 billion, resulting in a cut of around 94%,” he said.