Millennium Post

ED arrests former Bhushan Power & Steel CMD Sanjay Singhal

ED arrests former Bhushan Power & Steel CMD Sanjay Singhal

New Delhi: The Enforcement Directorate on Friday night arrested Sanjay Singhal, the former Chief Managing Director of Bhushan Power and Steel Limited, in connection with a money laundering case linked to a bank loan fraud it is probing against the now-bankrupt company.

Singhal had not been spotted for almost eight months after the CBI had registered Rs 2,348 crore bank fraud case against him and his company in April this year.

Officials with direct knowledge of the matter said Singhal will be produced for his custody hearing at a Special CBI court in Rouse Avenue here on Saturday. According to the case registered by the Central Bureau of Investigation, Bhushan Steel had amassed a total default amount of whopping Rs 47,204 crore from 2007 to 2014, which is owed to a consortium of 33 banks. Soon after the CBI raided his premises, the agency had issued a Look-Out Circular (LoC) for Singhal and his wife Aarti, also listed as director in the debt-ridden firm, at the time.

The ED was quick to register a corresponding money laundering case against the company, taking cognizance of the CBI FIR and had also attached its properties worth around Rs 4,025 crore in October.

But the ED got into a legal hurdle when the National Company Law Appellate Tribunal (NCLAT) pulled it up for attaching a company's assets that had already declared bankruptcy and was involved in proceedings under the Insolvency and Bankruptcy Code. In fact, the NCLAT had ordered the ED to release the attached assets on October 14 following which the ED's controlling ministry — Ministry of Finance — was asked to reconcile differences with the Ministry of Corporate Affairs with respect to this case.

Interestingly, the staggering bank default amount is not the only skeleton in Singhal's closet. Bhushan Power is also being probed by the ED for allegedly having paid kickbacks to firms and companies of Deepak Kocchar and Rajiv Kocchar in exchange for large amounts of loans from ICICI Bank, headed by Deepak's wife Chanda Kocchar, at the time.

Documents with the CBI revealed that loans worth Rs 586.6 crore were sanctioned and disbursed to BPSL between 2007 and 2014. Chanda Kocchar became Chairperson of the private lender in 2009. This had pulled Bhushan Steel into the purview of the ICICI-Videocon probe.

Eventually, the ED maintained that at least five other companies had done favours to Kocchar's relatives to get loan amounts disbursed.

Abhinay Lakshman

Abhinay Lakshman

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