Bhushan Steel stock drops 20%, market value down Rs 2,000 crore

The Bhushan Steel stock lost another 20 per cent of its value on Wednesday even as the Central Bureau of Investigation (CBI) started a manhunt to nab the company's vice-chairman Neeraj Singhal in connection with the Syndicate Bank bribery scandal.

The market value of Bhushan Steel, India's largest maker of auto grade steel, has dropped Rs 2,000 crore, or 23 per cent, ever since the CBI arrested Syndicate Bank's chairman and managing director S K Jain for accepting a bribe of Rs 50 lakh.

Also on Tuesday, a Delhi court rejected a plea for anticipatory bail filed by Singhal's lawyers, who argued that he was read to cooperate with the ongoing probe. The prosecution, however, maintained that the Bhushan Steel executive was a key player in the entire fraud. 

Singhal was instrumental in passing on the bribe money to Jain and was present in his house when the CBI team reached the spot for search and raid operations.

The CBI is investigating its own officers for not arresting Singhal when they raided his Delhi house last Friday. Since then, Singhal is not traceable.

Meanwhile, Prakash Industries, another company that is under CBI investigation for bribing Jain, lost 25 per cent of its value or Rs 365 crore ever since the cash-for-loan scam was busted by the CBI.

Both companies allegedly tried to settle the outstanding loan by bribing Jain. Apart from Singhal, middleman Purshottam Lal Totlani has also been evading arrest. So far, the CBI has arrested nine accused in this case, including Jain, his two brothers-in-law, Prakash Industries' Ved Prakash Agarwal and another company executive Vipul Agarwal.

Syndicate Bank has an exposure of Rs 1,500 crore in Bhushan Steel, while Prakash Industries had borrowed Rs 120 crore from the bank.

CBI officials said they were investigating other lenders as well, but they have not disclosed the names as yet.