New Delhi: Neeraj Singal, former promoter and managing director of Bhushan Steel was arrested by the Serious Fraud Investigation Office (SFIO).
He is accused to be guilty of siphoning off funds of over Rs 2,000 crore from the loans availed by Bhushan Steel using more than 80 companies, according to finance ministry tweet.
The companies were used for fraudulent activities of rotation of funds through bogus loans & advances, investments among others. Fraudulent activities contributed to the firm becoming insolent, finance ministry tweeted.
Bhushan Steel 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 Singals.
This is the first arrest by SFIO. Mr Singal was produced before the court of competent jurisdiction on Thursday and was sent to judicial custody till August 14, 2018, said finance ministry.
This arrest was made as part of the investigation into the affairs of Bhushan Steel and its several group firms by SFIO. The investigation was assigned by the corporate affairs ministry to SFIO based on the complaints received from various sources.
The arrest has been made by in exercise of the powers under Section 212(8) of the Companies Act, 2013, based on the material in its possession which has revealed that Mr Singal is guilty of indulging in serious corporate fraud punishable under Section 447 of the Companies Act, 2013, said the ministry. “The investigation is under progress,” it said.