ED attaches Rs 4,000 cr assets of Bhushan Steel

Tribune News Service

New Delhi, October 12

The Enforcement Directorate on Saturday said it had attached assets worth 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 says 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 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 against the company, Singal and others on charges of corruption. The ED charged that the 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 Rs 3,330 crore invested as equity by promoter companies was found to have been routed out of the funds obtained as loans and diverted from accounts of BPSL in shape of advances shown to various shell companies.

Mehul Choksi cheated PSB of Rs 441 million

• The public sector Punjab & Sind Bank (PSB) has revealed around Rs 441 million loan exposure to the absconding diamantaire Mehul Chinubhai Choksi on Saturday.
• This is the first time the 111-year-old bank has come clean on the default perpetrated by Choksi, who has now settled as a citizen of Antigua & Barbados, the West Indies.
• The New Delhi-based PSB has issued notices proclaiming him as a “willful defaulter” who owes the bank the amount for which it has initiated recovery proceedings against him.