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ED puts lens on IBC frauds, including excessive haircuts

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activeCyber Crime / Digital ArrestPan India

ED puts lens on IBC frauds, including excessive haircuts

The Enforcement Directorate has initiated a targeted drive against alleged financial fraud under the Insolvency and Bankruptcy Code. Agency officials have been directed to investigate dubious resolution processes that involve disproportionately large haircuts, which reportedly allowed defaulting promoters to re-acquire their assets.

State

Multiple States

First reported

September 2026

Agency involved

Enforcement Directorate

Key official

ED Director Rahul Navin

Focus area

Insolvency and Bankruptcy Code (IBC) frauds and excessive haircuts

Reported hair-cuts

Up to 97-99% of admitted claims in prominent cases

Status

Drive initiated and investigations underway

The full story

Everything you need to know about this case, in one place.

During a high-level meeting in Bengaluru, the agency's director instructed zonal offices to scrutinize resolutions cleared by the National Company Law Tribunal. Investigators are tasked with identifying red flags, reviewing transactions flagged by resolution professionals, and launching independent money laundering probes against the masterminds behind these operations.

Authorities are focusing on prominent cases where ownership of bankrupt entities was allegedly transferred to front companies after creditor banks accepted massive write-offs on admitted claims. Additionally, the agency is examining the legal interplay between the insolvency framework and anti-money laundering powers regarding asset attachments and statutory immunities.

Not yet reported: The articles do not name specific companies, defaulting promoters, or the exact total financial loss incurred across these IBC cases.

Where the case stands

The latest position in the reports we read.

The Enforcement Directorate has instructed its zonal offices to begin investigations and file intervention applications before the tribunal, though specific criminal charges or court outcomes for individual cases were not detailed.

Who was affected

Described in general terms; we do not name victims.

Creditor banks that faced massive financial write-offs, along with the broader financial system affected by alleged asset manipulations.

Timeline

Key dates as reported, oldest first.

During a recent three-day high-level meeting in BengaluruThe Enforcement Directorate director instructed zonal offices to initiate money laundering investigations into dubious IBC resolutions.

How the scam worked

The method described in the reports.

Defaulting promoters allegedly manipulated corporate insolvency resolution processes.
Front entities formed the majority in committees of creditors to manipulate voting outcomes.
Creditor banks were subjected to disproportionately large haircuts, reaching up to 97 to 99 percent of admitted claims.
Bankrupt companies and their ownership were allegedly transferred back to the original defaulting promoters or front entities through NCLT-cleared resolutions.

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Sources and further reading

Optional. The full story is above; these are the original reports it was prepared from.

timesofindia.indiatimes.comOriginal report Times of India<![CDATA[https://timesofindia.indiatimes.com/india/ed-puts-lens-on-ibc-frauds-including-excessive-haircuts/articleshow/134273007.cms]]>ED puts lens on IBC frauds, including excessive haircuts - The Times of IndiaThe Times of India · 16 Sept 2026

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