Yet Another Scam, Allahabad Bank Accuses Bhushan Power & Steel Of Rs 1,775 Crore Fraud
Allahabad Bank has reported a fraud of over Rs 1774 crore by the company. The bank has already made provisions amounting to Rs 90020 crore against exposure of the bank in BPSL. The steel company which went bankrupt in 2016 was among the first 12 companies referred by the RBI to a bankruptcy court.
The financial fraud involving Bhushan Power And Steel is turning out to be something, unlike anything that has happened in the country in the past.
Days after the Punjab National Bank (PNB) reported a fraud worth Rs 3,805.15 crore by BPSL, Allahabad Bank has reported a fraud of over Rs 1,774 crore by the company.
BCCL
According to a regulatory filing by Allahabad Bank to the RBI, forensic audit investigation findings and CBI filing FIR against the company and its directors, alleging diversion of funds from the banking system by BPSL, a fraud of Rs 1,774.82 crore.
¡°It has been observed that the company has misappropriated bank funds, manipulated books of accounts to raise funds from consortium lender banks,¡± Allahabad Bank said in its statement, adding that the bank has already made provisions amounting to Rs 900.20 crore against exposure of the bank in BPSL.
BCCL
According to the CBI, BPSL diverted around Rs 2,348 crore through its directors and staff from the loan accounts of PNB (IFB New Delhi & IFB Chandigarh), Oriental Bank of Commerce (Kolkata), IDBI Bank (Kolkata) and UCO Bank (IFB Kolkata) into the accounts of more than 200 shell companies without any obvious purpose.
The steel company which went bankrupt in 2016 was among the first 12 companies referred by the RBI to a bankruptcy court for a debt resolution process under India¡¯s new insolvency law.
At present, the case is in the National Company Law Tribunal (NCLT), which is in advance stage and the bank expects a good recovery in the account. It is expected that more banks may report fraud committed by BPSL in the coming days.
BCCL
The news of financial fraud comes at a time when banks in the country have been hit by a number of high profile financial misappropriation cases and mounting bad loans. PNB is yet to recover from the brand damage it suffered following the revelation of the fraud committed by diamond businessman Nirav Modi and his company last year.
Bobins Abraham is the Assistant News Editor at Indiatimes. He has more than twelve years of experience in TV and digital journalism. An avid student of history and geopolitics, he is a conservationist and environmentalist at heart. He writes on environment, sustainability, human-animal conflict and more.
Read More
