ED arrests ex-Bhushan Power & Steel CMD Sanjay Singal for bank loan fraud

The ED on Friday arrested former Bhushan Power and Steel Ltd CMD Sanjay Singal in connection with its probe in a multi-crore money laundering case linked to an alleged bank loan fraud, officials said.
They said Singal was placed under arrest, under the Prevention of Money Laundering Act (PMLA), after he was questioned in connection with the case.

He will be produced before a court here on Saturday for seeking further custody, the officials said.
He was arrested as he was not cooperating in the probe, they said.
The ED has recently attached assets worth Rs 4,025 crore of Bhushan Power and Steel Limited (BPSL).
"An amount of Rs 695.14 crore was introduced as capital by Sanjay Singal (the then CMD of the company) and his family members in BPSL out of artificially generated long-term capital gains (LTCG) by diversion of bank loans fund of BPSL," the ED had said.

ED attaches Bhushan Steel assets worth Rs 4,000 cr in bank fraud probe

The Enforcement Directorate on Saturday said it has attached assets worth over Rs 4,025 crore of Bhushan Power and Steel Limited (BPSL) in connection with its money laundering probe linked to an alleged bank loan fraud.
The central probe agency said it has attached land, building, plant and machinery of the firm located in Odisha under the provision of the Prevention of Money Laundering Act (PMLA).

The total value, under the provisional order for attachment, is Rs 4,025.23 crore. This is the first attachment in the case and more is expected.
The ED, in a statement, alleged that BPSL used various modus operandi to siphon funds obtained as loans from various banks.
"An amount of Rs 695.14 crore was introduced as capital by Sanjay Singal (the then CMD of the company) and his family members in BPSL out of artificially generated long-term capital gains (LTCG) by diversion of bank loans fund of BPSL," it said.
LTCG was exempted from income tax during the relevant time, it added.
The ED's case of money laundering was filed after studying the CBI FIR registered against the company, Singal and others on charges of corruption.
The ED charged that BPSL had also made RTGS payments to various entities against "fictitious purchases" of capital goods.
Against RTGS payments, these entities had transferred cash to BPSL which was ultimately traced to have been used for generation of artificial LTCG by jacking up the prices of penny stocks by way of synchronised trading, the ED said.
Another amount of Rs 3,330 crore invested as equity (share capital and premium) by promoter companies was also found to have been routed out of the funds obtained as various loans and diverted from accounts of BPSL in the shape of advances shown to various shell companies operated by the different entry operators, it said.
The proceeds of crime in this case, the agency said, were laundered by way of introduction into the books of accounts as equity for window dressing the debt equity ratio.

After PNB, Punjab & Sind Bank detects Rs-238 cr fraud by Bhushan Power

Punjab & Sind Bank (PSB) said on Wednesday it has reported a Rs 238 crore ($34.58 million) fraud to the country's central bank, relating to allegations of diversion of funds by the indebted Bhushan Power & Steel Ltd.
Earlier this month, Punjab National Bank (PNB) said it had reported a borrowing fraud of Rs 3805 crore in Bhushan Power's account to the Reserve Bank of India (RBI).

Both these banks are among a host of financial creditors who have claimed a collective Rs 47,303 crore from Bhushan Power, which the RBI referred to a bankruptcy court in 2017.
It has been observed that the company has misappropriated bank funds, manipulated books of accounts to raise funds from the consortium of lenders, New-Delhi based PSB said in a statement on Wednesday.
The case is currently at the country's company law tribunal and the bank expects good recovery, it said.
State-owned PSB also said it has made provisions amounting to Rs 189 crore relating to its exposure to the Bhushan Power account.