The Enforcement Directorate has arrested Jitesh Gupta for allegedly manipulating the insolvency process of Best Foods. The arrest is tied to a wider investigation into a ₹1,740.30 crore bank fraud. This development highlights potential risks to creditor recovery and underscores the intense regulatory scrutiny surrounding bankruptcy proceedings.
The Enforcement Directorate (ED) has arrested Jitesh Gupta, an insolvency professional, on charges of manipulating the corporate insolvency resolution process (CIRP) of Best Foods Ltd. The arrest, executed under the Prevention of Money Laundering Act (PMLA), adds a new layer to the ongoing investigation into a massive financial fraud case linked to the company.
Connection to Bank Fraud Case
This action is part of a broader investigation into a ₹1,740.30 crore bank fraud that has been under scrutiny since 2020. The ED had previously arrested Dinesh Gupta, the former Managing Director of Best Foods, in August 2025, alleging that loan funds were diverted through various shell companies. The agency has been aggressively pursuing asset recovery, having attached properties worth approximately ₹266.58 crore as of July 2026 to recover the losses caused by the alleged diversion of funds.
Allegations of Process Manipulation
The probe into Jitesh Gupta centers on his conduct as the resolution professional for Best Foods and its associated entities. The investigation claims that he manipulated the insolvency process to favor the former management. According to the ED, Gupta allegedly re-admitted claims that had been previously rejected as fraudulent, effectively altering the composition of the Committee of Creditors. This manipulation is said to have paved the way for a resolution plan that the agency claims was a front for the former promoters, aimed at regaining control of the entity through a proxy.
NCLT Background
The irregularities in the insolvency process are not entirely new. The National Company Law Tribunal (NCLT) had previously issued adverse observations regarding Gupta’s conduct as early as September 2025. In its findings, the tribunal noted that Gupta had acted beyond his legal authority and relied on documents that lacked credibility. Consequently, the tribunal had ordered his removal from the case well before the recent arrest by the federal agency.
Implications for Creditors
For investors and creditors, such incidents create uncertainty regarding the speed and effectiveness of the insolvency resolution process. When the integrity of an insolvency professional is challenged, it can lead to significant delays in the resolution timeline, legal hurdles, and potential cost overruns for the creditors involved. The case underscores the risks associated with bankruptcy proceedings where there may be a collusion between former management and those responsible for conducting the insolvency resolution. Market participants and creditors typically monitor the appointment of resolution professionals and tribunal orders to assess the stability and transparency of such recovery processes. The investigation into the matter is ongoing, and Jitesh Gupta remains in ED custody for further questioning.