NEW DELHI: The Enforcement Directorate on Friday arrested Neeraj Singhal, promoter and former managing director of Bhushan Steel Ltd, followed by a search operation at his residence in connection with its probe in a bank fraud case of Rs 56,000 crore. Singhal has been remanded in ED custody by a special court here till June 20.
The ED’s probe is based on a prosecution complaint filed by the Serious Fraud Investigation Office against Bhushan Steel and its directors.
The agency has accused Singhal of forming an array of dummy/shell companies, moving funds from one company to another via a chain of multiple entries to layer and integrate the funds. “The funds were circulated to infuse capital, buy property and other personal purposes,” the agency claimed.
“During probe, it was revealed that the promoters/directors and officials of BSL prepared forged documents and made fraudulent representations before the banks to discount Letters of Credit and diverted funds back into their own web of companies with malafide intentions,” the ED said.
The ED further claimed the bank funds were misappropriated against the fabricated LCs created in favour of JSW Steel Ltd and Hindustan Zinc Ltd and funds were further diverted into BSL and other associated companies, causing wrongful loss to State Bank of India and Punjab National Bank.

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