ED books Bhushan Power promoters, directors for laundering Rs 2,348 crore

Probe finds Sanjay Singal, others diverted funds from PSBs' loan accounts

The Enforcement Directorate (ED) has filed a money laundering case against Bhushan Power and Steel (BPSL); its promoter Sanjay Singal; his wife, Aarti Singal; and directors, for allegedly siphoning off Rs 2,348 crore from loan accounts of multiple state-run banks.

According to the enforcement agency, the company promoters and directors of BPSL entered into a criminal conspiracy and diverted the loan amounts to dozens of shell companies created for this purpose. 

“The Enforcement Case Investigation Report (ECIR) was registered on Wednesday against the firm and its promoters, directors and other staffs under the Prevention of Money Laundering Act (PMLA),” said an official privy to the development. 

“We have found huge discrepancies and falsification in the books of many entities associated with the firm. Some of the entities are Cheery Commonsales, Meghna Commondeal, and Dharmik Daltrade,” he said. “There are reasons to believe that the suspected entities and person appears to have directly and indirectly attempted to indulge or involved in a process connected with the proceeds of crime,” said the report. These entities saw money laundering by suspected persons, it added. 

The ED move follows the Central Bureau of Investigation (CBI) action in the matter. The CBI in April had carried an extensive search at 18 locations, including Delhi-NCR, Kolkata, Chandigarh and Odisha after registering a cheating case against Singal and others. Other than Singal, the CBI has also filed case against company’s Directors Ravi Prakash Goyal, Ram Naresh Yadav, Hardev Chand Verma, Ravinder Kumar Gupta and Ritesh Kapoor, besides unidentified public servants.

The ED is probing the findings of the CBI, which had alleged that the firm had diverted the amount through its directors and staff from the loan accounts of Punjab National Bank (IFB, New Delhi & IFB Chandigarh), Oriental Bank of Commerce (Kolkata), IDBI Bank (Kolkata) and UCO Bank (IFB, Kolkata) into the accounts of various shell firms without any obvious purpose.  

The CBI in its report also alleged that the company availed various loan facilities from 33 banks/financial institutions during 2007 to 2014 to the tune of Rs 47,204 crore and defaulted on repayments. Subsequently, lead bank PNB declared the account as a non-performing assets followed by other banks. 

According to the probe agency, the accused were part of a criminal conspiracy to cheat banks, financial institutions and government exchequer. 

When contacted, Sanjay Singal refused to comment, sayingt he is not aware about the development. 

“The accused dishonestly and fraudulently diverted huge amount of funds through firms/shell companies/entities and deliberately defaulted in repayment and also claimed inadmissible CENVAT credit, etc.” CBI had said. 

The lookout circulars have been also issued against all the entities named in the ED report.

Meanwhile, the resolution process is under way in the National Company and Law tribunal (NCLT). Bpcl was admitted in by the tribunal in 2017 for initiation of the corporate insolvency resolution process on the plea of Punjab National bank. BPSL’s financial creditors have in August last year approved JSW Steel’s resolution plan that involves a payment of Rs 19,350 crore to the financial creditors, implying a near 60 per cent haircut for lenders.

Cracking the whip

• ED is probing various shell firms, allegedly created to divert bank loan amount 
• Probe agency has registered the case under money laundering laws 
• Falsification of books and discrepancies in the books has been alleged
• Suspected entities indulged in a process connected with proceeds of crime 
• Entities have allegedly laundered loan amount to create tainted money 
• Move comes after the CBI registered an FIR in April