Bhushan Steel’s former promoter Neeraj Singal siphoned off `2k cr, held

NEW DELHI:

The Serious Fraud Investigation Office (SFIO) has arrested Bhushan Steel’s former promoter Neeraj Singal for allegedly siphoning off funds worth over Rs 2,000 crore, according to officials.

This is the first time that the SFIO has arrested a person for fraudulent activities, a senior official said.

Singal was arrested in the national capital and has been sent to judicial custody till August 14, another official said.

Financial Services Secretary Rajiv Kumar said it was paying time for those who have indulged in fraud and diversion of loans.

The probe agency, which comes under the Corporate Affairs Ministry, got powers to arrest people for violations of companies law last year.

In a release, the ministry said the arrest was made as part of the investigation into the affairs of Bhushan Steel Ltd (BSL) and its several group companies.

“During the investigation, the team has found that the erstwhile promoters of BSL have used a multitude of complex, fraudu

lent manoeuvres to divert/ siphon-off funds amounting to thousands of crores raised by the then management of BSL from public sector banks using its several associate companies,” the release said. Such activities

led to wrongful losses to the banks and other investors in these companies, it added.

In a series of tweets, the Finance Ministry said Singal is “accused of being guilty of siphoning off funds of over Rs 2,000 crore from the loans availed by BSL using more than 80 companies”.

“Bhushan Steel Limited is one of the 12 big cases that had been referred for insolvency resolution by banks. Tata Group has taken over management of the company from the Singals. SFIO investigation is on-going,” it said.

Incidentally, Singal who was the promoter for two companies Bhushan Steel and Bhushan Power is one the biggest bank defaulters in the country. Singal owes banks nearly Rs 80,000 crore.