Monday, September 26, 2022

Allahabad Bank declares Rs 1,774-cr fraud by Bhushan Power and Steel

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New Delhi: Kolkata-based Allahabad Bank has reported a fraud of Rs 1,774.82 crores by Bhushan Power & Steel to the Reserve Bank of India (RBI) on Saturday, the public sector bank said in a regulatory filing. “It has been observed that the company has misappropriated bank funds, manipulated books of accounts to raise funds from consortium lender banks,” the bank said.

The bank also said that it has already made provisions of Rs 900.2 crore against the exposure.

Second case of fraud by Bhushan Power & Steel

This makes it the second case of fraud reported by a PSB against Bhushan Power & Steel. Earlier this month, Punjab National Bank (PNB) reported a Rs 3,800 crore fraud by the company which is currently undergoing insolvency proceedings at the National Company Law Tribunal (NCLT) under IBC.

Allahabad Bank also said that it expects “good recovery” in the account.

The backdrop

Bhushan Power & Steel defaulted on loans worth Rs 47,700 crores in 2017 and was one of the 12 big cases flagged under the IBC. The company is also facing probe by the Serious Fraud Investigation Office (SFIO).

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