The Enforcement Directorate (ED), India's premier financial investigation agency tasked with probing money laundering and foreign exchange violations, has arrested Punjab Cabinet Minister Sanjeev Arora in a high-profile case involving alleged proceeds of crime exceeding Rs 100 crore. The arrest came on May 9, 2026, following early morning raids at multiple locations linked to the Aam Aadmi Party (AAP) leader, marking a significant escalation in the agency's scrutiny of the Punjab government.
Arora, a prominent businessman-turned-politician and one of Chief Minister Bhagwant Mann's most influential ministers, was taken into custody under the Prevention of Money Laundering Act (PMLA), 2002. The operation unfolded amid heightened political tensions in Punjab, less than a year before the state assembly elections scheduled for February 2027. This development has ignited a fierce debate over the use of central agencies against opposition-ruled states.
Who is Sanjeev Arora? From Business Tycoon to Key AAP Minister
Sanjeev Arora, aged 62, hails from Ludhiana, Punjab's industrial hub known as the 'Manchester of India' for its textile and manufacturing prowess. A Bachelor of Commerce graduate from SCD Government College, Ludhiana (affiliated with Panjab University), Arora built a successful career in real estate and related sectors before entering politics. His family-promoted Hampton Sky Realty Limited has been central to several of his business ventures, focusing on property development and investments.
Arora's political journey began with the AAP in 2022 when he was nominated to the Rajya Sabha, the upper house of India's Parliament, representing Punjab. He resigned from that position in July 2025 to contest the Ludhiana West assembly bypoll, which he won convincingly, securing his current role as MLA. Appointed as Cabinet Minister for Industries and Commerce, Power, Investment Promotion, Information Technology, and New and Renewable Energy Sources, Arora emerged as a pivotal figure bridging the AAP government with Punjab's powerful industrial lobby. His portfolios place him at the forefront of the state's economic revival efforts, including investor summits and power sector reforms.
Colleagues describe Arora as a low-profile yet effective administrator, credited with streamlining industrial policies and attracting investments post the AAP's 2022 victory. However, his business background has repeatedly drawn regulatory attention, culminating in the latest ED action.
Details of the Rs 100 Crore Money Laundering Probe
At the core of the ED's case is an alleged sophisticated scheme to launder money through fraudulent Goods and Services Tax (GST) transactions. Investigators claim Arora's companies generated bogus purchase bills for mobile phones worth over Rs 100 crore from non-existent firms primarily based in Delhi. These fictitious invoices were used to fraudulently avail Input Tax Credit (ITC), claim GST refunds on purported exports, and secure duty drawbacks from the government exchequer.
The process allegedly involved layering the illicit funds through a web of shell entities. Proceeds were routed abroad, particularly to Dubai, disguised as legitimate exports, and then round-tripped back to India as foreign investments. This mechanism, a classic hallmark of money laundering, allowed the tainted money to re-enter the system as clean funds, enriching the perpetrators while causing substantial revenue loss to the state. The Times of India detailed the mechanics of this operation, highlighting how fake bills created a paper trail for illegitimate benefits.
ED sources indicate that digital trails, bank statements, and GST portal data uncovered the discrepancies, leading to the raids. While specific seizures from the May 9 operation remain under wraps, past probes have yielded incriminating documents and electronic devices.
Timeline of ED Raids and Probes Against Arora
This is not the first time Arora has faced ED heat. The agency's interest dates back to October 2024, when searches were conducted at 17 locations, including his Gurugram residence and Ludhiana properties linked to Ritesh Properties and Industries Limited (formerly Hampton Sky Realty). That probe centered on money laundering from unauthorized land-use conversions—industrial plots illegally repurposed for residential and commercial development, causing financial losses to the Punjab government. No arrest followed then.
In April 2026, ED struck again under the Foreign Exchange Management Act (FEMA), raiding 13 premises across Punjab, Haryana, and Chandigarh. Allegations included round-tripping of UAE funds, ties to illegal betting syndicates like the Rs 6,000 crore Mahadev App scam via 'Khiladi Book' operators, insider trading, and hawala transactions. Arora's son Kavya and business partner Hemant Sood (of Findoc Finvest) were also targeted. Political influence was allegedly leveraged to shield betting operators in exchange for profit shares. Hindustan Times reported on these FEMA violations.
The latest PMLA case builds on these threads, with Hampton Sky Realty again in focus. Early May 2026 saw related raids on associates of AAP Punjab chief Aman Arora in a land scam, underscoring a pattern.
AAP's Response: 'Political Vendetta' by BJP
The AAP has vehemently denied the charges, framing the arrest as a desperate ploy by the BJP-led central government to destabilize the Punjab dispensation ahead of polls. Chief Minister Bhagwant Mann rushed to Arora's residence post-raid, declaring unwavering support. 'By conducting ED raids, their purpose is not to find black money but to signal: join BJP and be forgiven,' Mann stated, referencing recent defections like former AAP MP Ashok Kumar Mittal.
Delhi AAP convenor Arvind Kejriwal amplified the narrative on social media: 'Modi ji, conduct four more raids—the BJP will lose deposits everywhere. Arrested leaders walk free in days, but BJP won't set foot in Punjab for 20 years.' Punjab AAP chief Aman Arora echoed this, warning the Centre against misusing agencies.
Opposition BJP Counters: 'AAP's Clean Politics Exposed'
The BJP has seized the moment to attack AAP's anti-corruption credentials. State leaders claim the raids expose a 'massive corruption network' under Mann's rule, with Arora's business-politics nexus at its heart. 'AAP's pretence of clean politics is unravelled layer by layer,' a BJP spokesperson remarked, pointing to multiple ED cases against AAP figures nationally and in Punjab.
Defectors like Raghav Chadha (now BJP) have accused AAP of betraying Punjab's interests through graft. This narrative gains traction amid AAP's internal challenges, including leadership tussles and voter fatigue after four years in power.
Broader Context: ED's Campaign Against AAP
The arrest fits a larger pattern of ED actions targeting AAP. Nationally, Delhi CM Arvind Kejriwal and deputy Manish Sisodia face prolonged PMLA custody in the excise policy scam. In Punjab, probes into land scams, fake job letters, and now GST fraud have ensnared ministers and MLAs. Since AAP's 2022 Punjab win, over a dozen leaders have defected post-ED scrutiny, weakening the party's base.
Critics argue ED's conviction rate hovers around 5% in political cases, fueling 'weaponization' claims. Supporters cite recovered assets worth thousands of crores as evidence of systemic graft busted.
Political Implications for Punjab Ahead of 2027 Elections
Arora's portfolios are critical to Punjab's economy—industries contribute 25% to GSDP, power shortages plague summers. His absence could stall investor summits like the April 2026 Amsterdam roadshow. AAP's 92-seat majority offers resilience, but cumulative ED pressure risks eroding public trust, especially among urban middle-class voters who propelled AAP to power on graft-busting promises.
Polls suggest BJP-SAD alliance revival, Congress resurgence. AAP may rally cadres around 'federalism vs Centre' theme, but internal probes could trigger more exits. Punjab's fiscal woes—Rs 3 lakh crore debt—amplify governance scrutiny.
Social Media and Public Reaction
On X (formerly Twitter), #SanjeevAroraArrest trended with over 50,000 posts. AAP sympathizers decried 'ED dictatorship'; BJP handles highlighted scam details. Ludhiana locals voiced mixed views—some praised Arora's development work, others questioned his business ties. Protests erupted outside his residence, with AAP workers clashing mildly with police.
The Tribune captured the charged atmosphere post-arrest.
Photo by Design Hills on Unsplash
Legal Road Ahead and Future Outlook
Arora will be produced before a PMLA court in Chandigarh, likely seeking 14-day custody for questioning. Under PMLA, bail is stringent—accused must prove non-guilt. ED may attach assets, file chargesheet within 60 days. If patterns hold, prolonged legal battles ensue.
For Punjab politics, this tests AAP's resilience. Mann's government must balance defiance with delivery on free power, jobs. Nationally, it underscores Centre-state friction, with opposition INDIA bloc amplifying misuse allegations. As investigations deepen, more revelations could reshape Punjab's power dynamics.