ED raids Ex-MD of Bhushan steel in Rs 56,000 loan fraud case
The Enforcement Directorate (ED) conducted search and survey operations on 13 October 2023 at 30 locations in Delhi NCR, Haryana, Kolkata, Mumbai and Bhubaneswar, as part of investigation under PMLA, 2002 against the erstwhile promoters of Bhushan Steel Limited (BSL) in connection with a Bank fraud of Rs 56,000 Crore.
During the search operations, various incriminating documents/digital records were recovered and seized. The digital evidences were found hidden with key employees/ confidants of erstwhile managing director of Bhushan Steel Neeraj Singal and the same were recovered during the search. Cash of Rs 72 Lakh, foreign currency/ travellers cheques worth Rs 52 lakh, and three luxury cars (Mercedes Benz) with acquisition value of Rs 4 Crore have been seized.
ED initiated investigation on the basis of prosecution complaint filed by Serious Fraud Investigation Office [SFIO]. The said complaint had invoked scheduled offences under the PMLA Act.
ED investigation revealed that erstwhile MD Neeraj Singal and his associates formed several shell companies, and rotated funds from one company to another through a chain of multiple entities. The funds were circulated to infuse capital, buy property and for other personal purposes not intended by the banks.
Investigations further revealed that promoters/directors and the officials of Bhushan Steel prepared forged documents and made fraudulent representations before the banks to discount Letters of Credit (LCs) and diverted the funds back into their own web of companies with malafide intentions causing wrongful loss to the State Bank of India and Punjab National Bank.
Earlier, ED had provisionally attached land situated at Village Karede Budruk, District Raigad, Maharashtra, plot located at Faridabad, Haryana and Plot located at District Kamrup, Assam valuing Rs 61.38 Crore. ED also arrested Neeraj Singal on 09 June 2023, and is presently in Judicial Custody.
It is to be noted here that Bhushan Steel underwent the Corporate Insolvency Resolution Process (CIRP) and Tate Steel emerged as the successful resolution applicant by paying Rs 35,571 crore against lenders admitted claims of Rs 56,000 crore. The resolution plan was approved by NCLT in May 2018.
Also Read: Resolution Plans
