₹90‑crore Fraud Alleged in Provogue Liquidation: Authorities Lock‑Down Plutus Holdings

This week, Mumbai’s corporate and financial landscape is rocked by allegations of a ₹90‑crore corporate liquidation fraud involving Plutus Holdings and former employees of Provogue (India) Limited. The scandal centers on manipulation of assets, undervaluation of subsidiaries, and delayed e‑auction processes during the company’s insolvency proceedings. With the Economic Offences Wing (EOW) launching a probe, questions are rising about the role of resolution professionals and the safeguards in India’s insolvency and bankruptcy framework.

Background/Context

Provogue (India) Limited, once a leading fashion retailer, faced a sudden liquidity crisis in 2021 when its loans with Union Bank of India went non‑performing, triggering the Insolvency and Bankruptcy Code (IBC) proceedings. Amit Gupta was appointed as the company’s Resolution Professional (RP), while the firm was eventually sold in early 2023 to Plutus Investment and Holding Pvt Ltd (Plutus Holdings). The sale, and subsequent allegations, have highlighted shortcomings in the IBC’s oversight and the responsibilities of resolution professionals, especially during liquidation stages.

This case has become a bellwether for corporate liquidation fraud in India. Regulators and industry watchdogs are now scrutinising how RPs and their teams handle sensitive transactions, valuing subsidiary assets, and safeguarding creditors’ interests—particularly in cross‑border deals that can be easily obfuscated.

Key Developments

• FIR and Arrests – Amboli police registered an FIR on 14th November 2025, charging Amit Gupta, Sameer Khandelwal, Rakesh Rawat, and Arpit Khandelwal with cheating, forgery, and criminal conspiracy under the Indian Penal Code (IPC) and the Prevention of Money Laundering Act (PMLA).
• Undervaluation of Elite Team Hong Kong – The subsidiary, valued at ₹54.72 crore in the 2017–18 balance sheet, allegedly had its assets mislabeled as “Other Assets” in the liquidation report, obscuring the true value of two Hong Kong properties.
• Uncollected Export Receivables – Between 2018 and 2022, receivables of ₹32.71 crore were left unpaid by export clients, while the RP allegedly executed new export deals that further siphoned resources.
• Delays in E‑Auction – Gupta reportedly stalled the e‑auction process by almost two years, leading to depreciation in asset values and reduced returns to secure creditors.
• Alleged Sale of Hong Kong Property – In 2025, Arpit Khandelwal reportedly sold a Hong Kong property for “crores” of rupees, benefiting from an undervalued sale price, arguably financed by hidden gains.

According to the FIR, the RP and the PLutus team “operated through a former Provogue employee, Sameer Khandelwal, who maintained contact with former director Rakesh Rawat.” The complaint claims that the RP orchestrated a network that concealed the real financial position of Elite Team Hong Kong from independent valuers appointed before the auction.

“If a resolution professional can manage to hide assets and misrepresent valuations, the entire creditor structure is jeopardised,” said a senior officer from the EOW (name withheld). “We are conducting a thorough audit of the entire liquidation file and will bring criminal accountability where required.”

Impact Analysis

For professional bodies, lawyers, auditors, and investors, this case underscores that:

• Creditor Confidence is Fragile – Misrepresentations trigger mistrust, potentially slowing down future insolvency proceedings and increasing the cost of capital for distressed firms.
• Cross‑Border Insolvency Risks – Hidden foreign assets can be used as shield by resolution teams; strict scrutiny is required to prevent asset stripping.
• Regulatory Reforms – The incident has prompted calls for tighter disclosure norms for resolution professionals, especially around re‑valuation and e‑auction timelines.
• Student Entrepreneurs – For those studying corporate finance or planning to start their own ventures, awareness of insolvency pitfalls becomes crucial. A mismanaged liquidation can wipe out savings and tarnish reputations.

Furthermore, financial institutions may reassess loan covenants and personal guarantees, possibly tightening credit limits for high‑risk borrowers. The perceived volatility could influence market sentiment, particularly in the apparel and retail sectors.

Expert Insights & Tips

Financial regulator Dr. Neelam Gupta, an expert in insolvency law, advises:

“Resolution professionals must adhere strictly to the valuation protocols set out in the IBC. They should maintain an independent audit trail and provide transparent access to data for valuers and creditors.”

For students and budding professionals:

• Understand the Insolvency and Bankruptcy Code (IBC)—its procedures, timelines, and the role of RPs.
• Learn how asset valuation works, especially for cross‑border subsidiaries; audit reports should be scrutinised for any suspicious adjustments.
• Familiarise yourself with financial forensic techniques—to detect gaps in receivables and hidden assets.
• Stay updated with regulatory guidelines from the Ministry of Corporate Affairs (MCA) and EOW disclosures.
• Maintain a robust ethical framework—any deviation can attract criminal charges under IPC, IPC section 120B (conspiracy), and even PMLA.

Law students should explore case studies like Provogue to understand how corporate liquidation fraud can unfold and how investigative techniques are applied in real cases.

Looking Ahead

Regulators are now considering amendments to IBC that would:

• Introduce a mandatory audit of all valuations conducted by RPs before publication.
• Limit the permissible time lapse between the initiation of liquidation and the e‑auction to 12 months.
• Establish a dedicated oversight committee within the MCA to monitor high‑risk liquidation cases.

Meanwhile, the EOW will likely release a detailed forensic report within the next 90 days, which could lead to further prosecutions or civil proceedings against the accused parties.

For the corporate community, this case is a stark reminder that transparency and diligence are non‑negotiable in insolvency work. As the legal framework tightens, the market will witness a shift towards more robust and accountable resolution practices.

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