ED Attaches Assets Of Bhushan Power & Steel Worth Over Rs 4,000 Crore In Money Laundering Case
The Enforcement Directorate said today it has attached assets worth over Rs 4,025 crore of Bhushan Power & Steel Ltd. in connection with its money laundering probe linked to an alleged bank loan fraud.
The central probe agency said it has attached land, building, plant and machinery of the firm in Odisha under the provision of the Prevention of Money Laundering Act.
The total value, under the provisional order for attachment, is Rs 4,025.23 crore. This is the first attachment in the case and more is expected.
The agency, in a statement, alleged that BPSL used various modus operandi to siphon funds obtained as loans from various banks.
“An amount of Rs 695.14 crore was introduced as capital by Sanjay Singal (the then chief managing director) and his family members in BPSL out of artificially generated long-term capital gains by diversion of bank loans fund of BPSL,” it said.
Long-term capital gains tax was exempted from income tax during the relevant time, it said.
The ED’s case of money laundering was filed after studying the Central Bureau of Investigation’s First Information Report registered against the company, Singal and others on charges of corruption.
The ED charged that BPSL had also made real-time gross settlement payments to various entities against “fictitious purchases” of capital goods.
Against real-time gross settlement payments, these entities had transferred cash to BPSL which was ultimately traced to have been used for generation of artificial LTCG by jacking up the prices of penny stocks by way of synchronised trading, the ED said.
Another amount of Rs 3,330 crore invested as equity (share capital and premium) by promoter companies was also found to have been routed out of the funds obtained as various loans and diverted from accounts of BPSL in the shape of advances shown to various shell companies operated by the different entry operators, it said.
The proceeds of crime in this case, the agency said, were laundered by way of introduction into the books of accounts as equity for window dressing the debt equity ratio.