Neeraj Singal, former promoter of Bhushan Steel has been arrested by Serious Fraud Investigation Office (SFIO) for allegedly siphoning off funds worth over Rs 2,000 crore, according to officials. This is the first time the SFIO has arrested a person for fraud, a senior official said. Neeraj was arrested in Delhi and has been sent to judicial custody till August 14, another official said.
Financial Services Secretary Rajeev Kumar took to his Twitter account to say that it was time up for those who have indulged in fraud and diversion of loans.
In a release, Corporate Affairs Ministry, which gave SFIO powers to arrest people for violations of the Companies Law last year, said the arrest was made as a part of the investigation into the affairs of Bhushan Steel (BSL) and its several group companies.
"During the course of the investigation, the team has found that the erstwhile promoters of BSL have used a multitude of complex, fraudulent manoeuvres to divert/ siphon-off funds amounting to thousands of crores raised by the then management of BSL from public sector banks using its several associate companies," the release read.
The ministry also said that the erstwhile promoters and directors of BSL have not been cooperating during the investigation. They added that not only did they fail to appear before the investigation, they also concealed facts.
Group companies were used for fraudulent activities, rotation of funds through bogus loans, fake investments, among others, the Finance Ministry said in a tweet.
Following the insolvency resolution process, BSL's ownership has been transferred to the Tata Group.