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More Lenders may Report Misappropriation of Funds by Bhushan Power & Steel - Report

Steel News - Published on Wed, 10 Jul 2019

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Business Today reported that 2 days after the Punjab National Bank announced the detection of the INR 3,805 crore frauds by Bhushan Power & Steel Ltd, the buzz is that the scope of the fraud may be much wider, involving as many as 33 lenders that have exposure to this company as CBI complaint registered on April 5 against BPSL names several other banks. According to the probe agency, BPSL diverted around Rs 2,348 crore through its directors and staff from the loan accounts of PNB (IFB New Delhi & IFB Chandigarh), Oriental Bank of Commerce (Kolkata), IDBI Bank (Kolkata) and UCO Bank (IFB Kolkata) into the accounts of more than 200 shell companies without any obvious purpose. The CBI said that the company in doing so had misused the funds and the FIR named chairman Sanjay Singhal, vice-chairman Aarti Singhal, along with other directors as suspects.

CBI had stated "It was further alleged that the said Company availed various Loan facilities from 33 banks & financial institutions during the year 2007 to 2014 to the tune of approximately INR 47,204 crore and defaulted on repayments. Subsequently, lead bank PNB declared the account as NPA followed by other banks and financial institutions.”

As per the FIR, the accused used the bank funds for purposes other than sanctioned by the bank by committing forgery for the purpose of cheating, used forged documents and falsified the accounts causing huge loss to the lending banks, financial institutions and the exchequer.

Significantly, sources in the know told the daily that JSW Steel, the highest bidder for the bankrupt company having offered INR 19,700 crore to acquire it, might decide to alter its bid in the future, if more information is revealed about the nature of the fraud.

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Posted By : Ratan Singh on Wed, 10 Jul 2019
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