Punjab National Bank, a Public sector lender, has reported to Reserve Bank of India that it has detected a fraud committed by Bhushan Power & Steel Limited (BPSL) of more than Rupees 3800 Crore on July 6th, 2019. According to the bank, Bhushan Power & Steel limited has manipulated its books of accounts to raise funds from the bank and thereafter misappropriated the funds of the bank.
In a regulatory filing, the bank has said that on the basis of forensic audit and investigation, the CBI has filed an FIR (First information report) against BPSL and its directors on suo moto basis. It is alleged that the company has committed a fraud of more than 3800 crores.
As per the banks’ statement, the case is at National Company Law Tribunal (NCLT) in its advanced stage and the bank accepts good recovery of its funds. Not only in India, had the company raised funds from consortium banks but from the banks abroad as well.
The bank has reported the following amount that has been misappropriated by the Company:
- Approximately 3192 crore Rupees from domestic banks in India,
- Approx. 346 crore Rupees oversees from Dubai branch and
- Approx. 268 crore Rupees from the Hong Kong branch.
The bank has detected this another fraud now, after just 1 and a half year of major financial embezzlement done by the diamond merchant, Nirav Modi of around 1300 Crore rupees in February 2018.
Nirav Modi had acquired fraudulent Letters of undertaking from one of the branches of Punjab National Bank and is still being investigated by the Enforcement Directorate and CBI among other departments.
In the current fraudulent case of Bhushan Power & Steel Limited, the Indian courts have never seen such a big case in the history of Judiciary. Reason being the 70,000 pages charge sheet filed by Serious fraud investigation office (SFIO). It is the investigation of the Ministry of Corporate Affairs (MCA).
SFIO has filed this 70,000 pages charge sheet against the 284 individuals. As per the counsels of accused, “This case needs the lifetime of Judicial officers as well as the counsels contesting on behalf of 284 accused” While as per the statement given by Senior counsel Hiten Venagaonkar, representing SFIO, “The Supreme Court has made it clear that if there is a case against a person, a charge sheet has to be filed against him. The prosecution cannot decide who to drop and who to include. If the witnesses are a few in number then the trial does not take long.”