NEW DELHI: The Serious Fraud Investigation Office (SFIO) Thursday arrested Neeraj Singhal, the erstwhile Promoter and Vice-Chairman of Bhushan Steel, in connection of siphoning off over Rs 2,000 crore.
“During the course of the investigation, the team has found that the erstwhile promoters of BSL have used a multitude of complex, fraudulent 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. This has led to wrongful losses to the banks and other investors in these companies,” an official statement from Ministry of Corporate Affairs said.
The company allegedly used more than 80 companies to use the loans availed by Bhushan Steel for fraudulent activities of rotation of funds through bogus loans and advances, investments, which ultimately pushed the company becoming insolvent.
He was produced before Court of competent jurisdiction on Thursday and sent to judicial custody till August 14.
Bhushan Steel is one of the 12 big cases that had been referred for insolvency resolution by banks. The company was referred to the NCLT last year after accumulating over Rs 50,000 crore debt.
This is also the first arrest by the SFIO since it was given the power last in August 2017 to arrest people for violations of companies law, with the government notifying relevant provisions amid the crackdown on illicit fund flows.