The Enforcement Directorate on Saturday said it has attached assets worth over 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. The central probe agency said it has attached land, building, plant and machinery of the firm located in Odisha under the provision of the Prevention of Money Laundering Act (PMLA).
The total value, under the provisional order for attachment, is Rs 4,025.23 crore.
This is the first attachment in the case and more is expected.
The ED, in a statement, alleged that BPSL used various modus operandi to siphon 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.
LTCG was exempted from income tax during the relevant time, it added.
The ED’s case of money laundering was filed after studying the CBI FIR registered against the company, Singal and others on charges of corruption.
The ED charged that BPSL had also made RTGS payments to various entities against “fictitious purchases” of capital goods.
Against RTGS payments, these entities had transferred cash to BPSL 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.
Another amount of Rs 3,330 crore invested as equity (share capital and premium) by promoter companies was also found to have been routed out of the funds obtained as various loans and diverted from accounts of BPSL in the shape of advances shown to various shell companies operated by the 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.