Former Bhushan Steel MD Neeraj Singhal.
New Delhi: India’s Serious Fraud Investigation Office (SFIO) has arrested Neeraj Singal, former promoter and managing director of Bhushan Steel Ltd, according to Twitter posts by the finance ministry today evening.
Serious Fraud Investigation Office (SFIO) arrests Mr. Neeraj Singhal in connection with investigation into the affairs of Bhushan Group of Companies; For full details, please log on:
— Ministry of Finance (@FinMinIndia) August 9, 2018
Neeraj Singal is accused of siphoning off more than ₹ 2000 crore of funds from loans availed by Bhushan Steel via use of more than 80 companies, the finance ministry says.
“The arrest has been made by in exercise of the powers under Section 212(8) of the Companies Act, 2013, based on the material in its possession which has revealed that Mr. Neeraj Singhal is guilty of indulging in serious corporate fraud punishable under Section 447 of the Companies Act, 2013,” the finance ministry said in a statement.
“The companies were used for fraudulent activities of rotation of funds through bogus loans and advances, investments, etc. Mr. Singhal was produced before the court and sent to judicial custody till 14 August,” the finance ministry added. “The erstwhile Promoters/ Directors of Bhushan Steel, have not been cooperating during investigation till now. Apart from failing to appear before the investigation team, the material facts were also concealed.”
On 18 May, Tata Steel announced its acquisition of Bhushan Stee through its wholly-owned subsidiary Bamnipal Steel Ltd, completing the resolution of the first case under the Insolvency and Bankruptcy Code (IBC), 2016.