Bhushan Steel’s erstwhile promoter Neeraj Singal (in pic) has been arrested by SFIO for allegedly siphoning off funds worth over Rs 2,000 crore. It is the first case of arrest by the Serious Fraud Investigation Office (SFIO). The probe agency got powers to arrest someone for violation of companies law last year.
Singal was arrested in the national capital and sent to judicial custody till August 14, according to an official release.
The finance ministry said Singal is “accused to be guilty of siphoning off funds of over Rs 2,000 crore from the loans availed by Bhushan Steel using more than 80 companies.”
The companies were used for fraudulent activities of rotation of funds through bogus loans and advances, and investments, among others, the finance ministry said in a tweet.
“Bhushan Steel 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 ongoing,” it said.
This arrest was made as part of the investigation into the affairs of Bhushan Steel Limited (BSL) and its several group companies by SFIO. The investigation was assigned by the Ministry of Corporate Affairs to SFIO based on the complaints received from various sources.
During the course of the investigation, the team has found that the erstwhile promoters of Bhushan Steel have used multitude of co-mplex, fraudulent manoeuvres to divert/siphon-off fun-ds amounting to thousands of crores raised by the then management of the company from public sector banks using its several associate companies. This has led to wrongful losses to the banks, investors in the companies.
The erstwhile promoters, directors have not been cooperating during the investigation till now. Apart from failing to appear before the investigation team, the material facts were also concealed, the release said.