July 08, 2019

Punjab National Bank Tells NSE That A Forensic Audit Has Detected Rs 3,800 Crore Fraud By Bhushan Power And Steel

[ By Bobby Anthony ]


The Punjab National Bank(PNB) has informed the National Stock Exchange of India Limited (NSE) of a Rs 3,800 crore loan fraud by Bhushan Power & Steel, involving the lender’s Chandigarh, Dubai and Hong Kong branches.

The bank has reported these details to the Reserve Bank of India and the amount stated by the bank in its books is Rs 1,932.47 crore.

The Rs 3,800 crore includes Rs 3,191 crore borrowed from Punjab National Bank’s Indian branch while amounts of USD 49.71 million and USD 38.51 million have been drawn from the overseas branches of the bank in Dubai and Hong Kong respectively.

Allegedly, Bhushan Steel used misappropriated funds to make false entries in its books to indulge in further borrowings from consortium banks and institutional lenders.

The company’s dealings were investigated by a forensic audit unit and based on these findings, the CBI has filed an FIR, the bank stated.

It is on the strength of these findings that the NPA provision amounting to Rs 1,932.47 crore has been made.

Incidentally, Bhushan Steels is one of the 12 companies identified by the RBI for insolvency proceedings.

Presently, the case is in the National Company Law Tribunal (NCLT) at an advanced stage and PNB expects recovery of the account, the notice to the NSE stated.

It may be recalled that parent company Bhushan Steel's former chief financial officer and director Nittin Johari was arrested by the Serious Fraud Investigation Office (SFIO) on May 2 and is now in judicial custody. He was arrested for alleged fraudulent activities, including filing false documents with various banks.

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