Bhushan Power & Steel Ltd assets worth Rs 4025.23 Cr seized in a bank fraud case

The attached assets include land, building, plant machines of the said company.

The federal financial probing agency  initiated investigations under PMLA on the basis of FIR registered by  the CBI under Section 120-B read with420, 468, 471 & 477A of IPC, Section 13(2) read with 13(1) (d) of Prevention of Corruption Act  against  BPSL and its then Chairman and Managing Director Sanjay Singal.

Investigations conducted under PMLA revealed that the company in question had used various modus operandi to siphon off funds obtained as loans from various banks, financial institutions.

“An amount of  Rs 695.14 crore was introduced as capital by Sanjay Singal and  his family members in BPSL out of artificially generated Long Term Capital Gains (LTCG) by diversion of bank loans fund of BPSL,” the release said.

BPSL had made payments to various entities by way of RTGS against fictitious purchases of capital goods. In lieu of the 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 synchronized trading, the ED statement reads further.

Another amount of  Rs 3330.09 crore invested as equity, the share capital and premium, by promoter companies was also found to have been routed out of the funds obtained as various loans from banks diverted from accounts of BPSL in the shape of advances shown to various shell companies operated by the different entry operators.

Investigations, so far, have disclosed that circular diversion of funds totalling to Rs 4025.23 crore was directly related to criminal activity of scheduled offence.

These proceeds of crime were laundered by way of introduction into the books of accounts as equity for window dressing the debt-equity ratio.

Investigations have further revealed that, during the relevant period when the loan funds were diverted and reintroduced as equity, the BPSL had acquired land, building and plant and machinery worth thousands of crore of Rupees at its Odisha plant, the ED officials stated.

The quantification of “Proceeds of Crime” as Rs 4025.23 Crore is interim as of now and investigations to identify further proceeds of crime are under progress, the probing agency added further.