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PNB Detects Rs 3,805 Crore Fraud By Bhushan Power & Steel

Bhushan Power & Steel was among the first 12 companies referred by RBI to a bankruptcy court for a debt resolution process under new insolvency law

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PNB Detects Rs 3,805 Crore Fraud By Bhushan Power & Steel

PNB has been defrauded of over $2 billion in a separate scam that came to light last year


Mumbai: 

The Punjab National Bank (PNB) on Saturday said it had reported a borrowing fraud of Rs 3,805 crore ($556 million) in Bhushan Power & Steel Ltd's account to the Reserve Bank of India (RBI).

The fraud, "alleging diversion of funds from the banking system" was being reported to the RBI on the basis of the findings of forensic audit and the police filing a first information report, the PNB said in a statement to stock exchanges.

"It has been observed that the company has misappropriated bank funds, manipulated books of accounts to raise funds from consortium lender banks," PNB said, adding that it had already made provisions of Rs 1,932 crore in Bhushan's account.

PNB has been defrauded of over $2 billion in a separate scam that came to light last year.

Bhushan Power and Steel, one of India's most indebted companies, was among the first 12 companies referred by the RBI to a bankruptcy court for a debt resolution process under new insolvency law.

The company could not be reached for comment on the PNB statement.



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