Fraud watchdog found Bhushan Steel to have engaged in manipulation of financials to avail loans from banks.
The steel maker filed for bankruptcy proceedings in 2017 and was subsequently acquired by Tata Steel.
The country’s top fraud watchdog SFIO has arrested Bhushan Steel’s former chief financial officer and director Nitin Johri, according to a senior official. The late evening arrest occurred on Friday and Johri has been remanded to two-day custody by the Patiala house court.
He has been arrested by the SFIO in connection with the ongoing investigations at the company. Johri was in charge of raising funds from banks for the company and reported directly to its promoters Neeraj Singal and Brij Bhushan Singhal.
SFIO probe found that Bhushan SteelNSE 0.70 % had manipulated its accounts and entered into several fraudulent transactions by getting letters of credit worth Rs 20,000 crore from various banks by producing false documents. The steel maker filed for bankruptcy proceedings in 2017 and was subsequently acquired by Tata Steel.
SFIO found Johri’s direct involvement in inflating the inventories of the company for availing enhanced working capital limits. The agency also arrested Bhushan Steel’s promoter Neeraj Singhal in August last year.
SFIO could press formal charges against Johri within next two months and then proceed to initiate legal action if his interrogation were to confirm accusations against them, the official said.
Separately, the Central Bureau of Investigation (CBI) has issued look out notices against Bhushan Power and Steel’s promoter, Sanjay Singal as it is also probing a case of fraud by the company.
Delhi High Court Grants Bail To Bhushan Steel Ex-CFO In Fraud Case
Thereafter Supreme Court Transfers Case Involving Ex-Promoter Of Bhushan Steel To Itself
The Supreme Court said Neeraj Singal, former promoter of Bhushan Steel, will remain out on interim bail granted by the Delhi High Court in a Rs 2,500-crore fraud case. A bench comprising Justice AM Khanwilkar and Justice DY Chandrachud, however, stayed the operation of the Delhi High Court judgement and transferred to itself the plea Singal had filed in the high court for adjudication.
The bench said it was only allowing the interim bail to continue, and the operation of the rest of the judgment regarding various aspects, including the Serious Fraud Investigation Office's power to arrest and investigate, will be deliberated later.
The Delhi High Court had on Aug. 29 granted bail to Singal, arrested by the Serious Fraud Investigation Office for allegedly siphoning off public funds. The apex court was hearing an SFIO plea to stay the Delhi High Court order in the case. The agency had earlier said his release will cause grave harm to the ongoing probe, which has reached an advanced stage.
The entire contents of this article are solely for information purpose and have been prepared on the basis of relevant provisions and as per the information existing at the time of the preparation by the Author. Compliance Calendar LLP and the Author of this Article do not constitute any sort of professional advice or a formal recommendation. The author has undertaken utmost care to disseminate the true and correct view and doesn’t accept liability for any errors or omissions. You are kindly requested to verify and confirm the updates from the genuine sources before acting on any of the information’s provided hereinabove. Compliance Calendar LLP shall not be responsible for any loss or damage in any circumstances whatsoever.