SFIO arrests Bhushan Steel's former promoter Neeraj Singal for siphoning off funds
The Serious Fraud Investigation Office (SFIO) has arrested Bhushan Steel's former promoter Neeraj Singal for allegedly siphoning off funds worth over Rs 2,000 crore, according to officials.
This is the first time that the SFIO has arrested a person for fraudulent activities, a senior official told PTI.
Singal was arrested in the national capital and has been sent to judicial custody till August 14, another official said.
Financial Services Secretary Rajiv Kumar said it was paying time for those who have indulged in fraud and diversion of loans.
"Another blow to Crony Capitalism. No mercy for siphoning off Public money. The arrest of ex-promoter of Bhushan SL -zero tolerance of Govt. to fraudsters & economic offenders #CleanBanking, नए भारत का आधार. #NPA Recoveries and action to continue. @PMOIndia @FinMinIndia @PIB_India," Kumar tweeted.
The probe agency, which comes under the Corporate Affairs Ministry, got powers to arrest people for violations of companies law last year.
"During the course of the investigation, the team has found that the erstwhile promoters of BSL have used a multitude of complex, fraudulent maneuvers to divert/ siphon-off funds amounting to thousands of crores raised by the then management of BSL from public sector banks using its several associate companies," the release said.
Such activities led to wrongful losses to the banks and other investors in these companies, it added.
According to the ministry, the erstwhile promoters and directors of BSL have not been cooperating during the investigation till now. Apart from failing to appear before the investigation team, the material facts were also concealed, it added.
Following the insolvency resolution process, BSL's ownership has been transferred to the Tata Group.
"Bhushan Steel Limited is one of the 12 big cases that had been referred for insolvency resolution by banks. Tata Group has taken over management of the company from the Signals. SFIO investigation is on-going," it said.
Rajiv Kumar also said the government is committed to bring all who have defrauded public money to book but promote honest and clean business.
(This story has not been edited by Devdiscourse staff and is auto-generated from a syndicated feed.)