After Punjab National Bank (PNB) and Allahabad Bank reported frauds, public sector lender Punjab & Sind Bank Wednesday reported a Rs 238.3-crore fund misappropriation Bhushan Power & Steel Ltd (BPSL).
“On the basis of forensic audit investigation findings and CBI filing FIR, on suo moto basis, against the company and its directors, alleging diversion of funds from banking system, a fraud of Rs 238.30 crore is being reported by the bank to the RBI,” the bank stated in a stock exchange filing.
“In the accounts of the company, the bank has already made provisions amounting to Rs 189.35 crore, as per prescribed prudential norms,” it added.
“It has been observed that the company has misappropriated bank funds, manipulated books of accounts to raise funds from consortium lender banks. At present, the case is at NCLT which is in advance stage and the bank expects good recovery in the account,” the PSU bank said.
Recently, PNB alleged that BPSL misappropriated bank funds and manipulated its books of accounts to raise funds from its consortium of lenders. Around 85 per cent of PNB’s Rs 4,399-crore exposure to BPSL was siphoned off. Allahabad Bank too had alleged misappropriation of funds by BPSL, with the bank reporting a fraud to the tune of Rs 1774.82 crore to the Reserve Bank of India.
As many as 33 lenders have exposure to BPSL, which is undergoing the corporate insolvency resolution process. On Monday, JSW Steel told the National Company Law Tribunal (NCLT) that it is not backing out from the ongoing resolution process of BPSL, despite reports of alleged fraud by its former promoters.
During the NCLT proceedings, the counsel appearing for JSW Steel informed the tribunal that the company was anxious about the alleged fraud reports and needs to know what is going inside BPSL.