New Delhi: The Enforcement Directorate (ED) attached assets worth Rs 4,025 crore of Bhushan Power and Steel Limited (BPSL) in connection with its money laundering probe linked to an alleged bank loan fraud on Saturday. The investigative agency said that it had attached land, building, plant and machinery of the firm located in Odisha under the provision of the Prevention of Money Laundering Act (PMLA).
This marks the first attachment in the case and is expected to lead to more.
‘Bhushan Power and Steel used various modus operandi’
In an official statement, the ED said that Bhushan Power and Steel used various modus operandi to divert funds obtained as loans from various banks. “An amount of Rs 695.14 crore was introduced as capital by Sanjay Singal (the then CMD of the company) and his family members in BPSL out of artificially generated long-term capital gains (LTCG) by diversion of bank loans fund of BPSL,” it said.
It added that LTCG was exempted from income tax during the said period.
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More funds diverted
The ED found that another amount of Rs 3,330 crores invested as equity (share capital and premium) by promoter companies was also found to have been routed out of the funds obtained as loans from banks. The said fund was diverted from the accounts of Bhushan Power and Steel in the shape of advances shown to various shell companies operated by 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.
The ED filed a case of money laundering against Bhushan Power and Steel after studying the CBI FIR registered against the company, Singhal and others on charges of corruption. The ED said that BPSL had also made RTGS payments to various entities against “fictitious purchases” of capital goods.
These entities had transferred cash to Bhushan Power and Steel against RTGS payments, 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.