Bank Fraud Case: Bhushan Steel’s assets worth Rs. 4000 crore attached by ED
Sat Oct 12 2019 / By: Jigi YadavThe ED, Enforcement Directorate has attached assets of one of the steel giants known to country, Bhushan power & Steel Limited. The reported assets worth Rs. 4025 crore are held in relation to the money laundering investigation of an alleged bank fraud. The ED has so far attached land, building, plant, machinery of the firm which is set up in Odisha. The assets are attached under Prevention of Money Laundering Act provision. It is estimated that this is the first attachment in the case so far and authorities are expecting more into it.
The ED stated that BPSL allegedly used different modes to draw off funds which it acquired as loans from various banks.
The then CMD of the company Mr. Sanjay Singhal and his family introduced an amount of Rs. 695.14 crore as capital in BPSL by diverting bank loans funds of the company into artificially generated long term capital gains, LTCG, as asserted by the ED. And during the relevant times, these long term capital gains were exempted from Income Tax.
The ED files this case of money laundering after thoroughly going through the FIR of CBI that was registered against BPSL, its former CEO and his family etc. on the charges of corruption. The ED also added that the company has transferred payments through RTGS for “fictitious purchases” of asset goods.
The rest amount of Rs. 3330 crores was invested by the company as share capital and premium by few promoter companies. This was routed out of the funds which were obtained as loans and further sidetracked from BPSL accounts in the name of advances. These advance payments were shown to different shell companies operated by a range of entry operators.