The Enforcement Directorate (ED) has attached immovable assets worth Rs 4,025.23 crore of Bhushan Power and Steel Ltd (BPSL) following investigations into money laundering allegations linked to an alleged bank loan fraud case.
The agency has attached assets, including land, building, plant and machinery of BPSL in Odisha under the Prevention of Money Laundering Act (PMLA), which is first attachment in the case, officials said.
The ED had initiated a money laundering probe against BPSL, its former Chairman and Managing Director Sanjay Singhal and others following the CBI registering a case of bank fraud.
In a statement, the ED said, BPSL had used "various modus operandi to siphon of funds obtained as loans" from various banks/financial institutions.
"An amount of Rs 695.14 crore was introduced as capital by Sanjay Singal and his family members in BPSL out of artificially generated long term capital gains (LTCG) by diversion of bank loans fund of BPSL. LTCG was exempted from income tax during the relevant time," it said.
The BPSL had also made RTGS payments to various entities against "fictitious purchases" of capital goods, the statement said.
These entities had transferred cash via RTGS 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".
"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 from banks and diverted from accounts of BPSL in the shape of advances shown to various shell companies operated by the different entry operators," the ED said.
The ED said the investigations have revealed "circular diversion" of Rs 4,025.23 crore.
"These proceeds of crime were laundered by way of introduction into the books of accounts as equity for window dressing the debt equity ratio...during the relevant period when the loan funds were diverted and reintroduced as equity, BPSL had acquired land, building and plant and machinery worth thousands of crores of rupees at its Odisha plant," the statement added.
At present, the ED said, they have quantified the proceeds of crime at Rs 4,025.23 crore and it is interim. Investigations to identify further proceeds of crime are under progress, it added.