ED arrests former MD of insolvent Best Foods in Rs 1,740 crore loan fraud case

The Directorate of Enforcement (ED), Headquarters, New Delhi, has arrested Dinesh Gupta, former Managing Director of Best Foods Limited, on August 8, 2025. He was produced before the competent court and remanded to six days of ED custody for interrogation. Following the custodial investigation, the court ordered his judicial custody on August 13, 2025, where he will remain detained until August 27, 2025.

The ED initiated its probe on the basis of an FIR registered by the CBI in 2020 against M/s Best Foods Limited and others. The agency has intensified its investigation into a major bank fraud case involving the alleged misappropriation of loans worth ₹1,740 crore taken from a consortium of banks by one of India’s largest processors of premium Basmati rice, M/s Best Foods Limited.

Between July 15 and 17, 2025, the ED conducted search operations under the Prevention of Money Laundering Act (PMLA), 2002, at five premises in Karnal, Chandigarh, Kaithal, and Ambala. During the searches, the agency identified and froze five high-end vehicles suspected to be proceeds of crime.

According to the ED, Dinesh Gupta allegedly manipulated the company’s auction process during liquidation by enabling the purchase of its properties through over 75 shell entities registered in the names of his relatives—circumventing legal and financial oversight. The agency claims to have unearthed benami assets worth more than ₹200 crore, suspected to have been acquired using diverted bank funds.

The ED is continuing its efforts to trace the trail of illicit funds and identify other individuals involved in the alleged fraud. Further investigation is underway.

Insolvency proceedings against Best Foods began in 2018 for default in paying an amount of Rs 25 lakh to a vendor. The NCLT in ordered the liquidation of the company. The corporate debtor, Best Foods Limited, is an exporter of rice and paddy.

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