The Enforcement Directorate on Friday filed a charge sheet against former Bhushan Power and Steel Ltd CMD Sanjay Singal and others in a multi-crore money laundering case linked to an alleged bank fraud, saying he was the "mastermind" behind diversion of loan funds.
Special Judge Arun Bhardwaj took cognisance of the charge sheet, which named 24 people and the company as accused, and issued production warrant against Singal for January 21.
ED's Special Public Prosecutor Nitesh Rana told the court in the charge sheet that the company and its directors deliberately defaulted in repayment of loan amount to lender banks as per the time scheduled and their accounts remained continuously irregular.
Rana said that these proceeds of crime were laundered by the way of infusion in form of equity in BPSL, creation of assets in the name of self or his family members directly or indirectly.
"BPSL through its directors availed various credit facilities from 33 banks/ financial institutions between 2007 to 2014 and the outstanding defaulted amount as on January 30, 2018 was rs 47,204 crore. BPSL availed various loan facilities from these banks under the leadership of PNB large corporate branch Chandigarh for different purposes namely working capital, term loan for purchase of plant of machinery, non-fund based term loans etc.
"The company and its directors deliberately defaulted in repayment of loan amount to lender banks as per the time scheduled and their accounts remained continuously irregular. The IT authorities have conducted searches on the premises of BPSL in Chandigarh on December 21, 2014 and found illegal diversion of funds from the accounts of BPSL through various modus operandi," the final report, filed through advocate A R Aditya, said
It added that BPSL and its directors and its staff "dishonestly and fraudulently" diverted Rs 2,348 crore into the account of various companies showing as advances between April 1, 2007 to March 31, 2014 without any obvious purposes and thereby misused funds.
"The investigations has revealed that accused are guilty of the offence of money laundering and liable to be punished under PMLA," it said.
It added Singal was mastermind behind diversion of loan funds from BPSL either in cash or through bank transfers through shell companies and group companies.
"These proceeds of crime were laundered by the way of infusion in form of equity in BPSL, creation of assets in the name of self or his family members directly or indirectly.
"He along with his associates had devised a scheme to dress up the books of accounts of BPSL and also to obtain undue monetary benefits. It involved dubious conversion of dead funds into equity and other assets," the agency said.
It added that Singal had employed different modus operandi to implement his nefarious designs.
"One such method was routing of the amount transferred by BPSL to various parties purportedly on the account of purchase of capital goods, whereas no actual movement of goods took place. The cash amount so generated was laundered through artificial generation of long term capital gains amounting to Rs 695.14 crore. The amount so artificially generated was invested by his family members and himself in BPSL which were nothing but the funds diverted from the accounts of BPSL.
"Thus the amount obtained as loan for specific purposes, legally belonging to the company, was illicitly transferred to the company itself as infusion of fresh equity. Thus by adopting this root Sighal was able to project the ill gotten money as genuine equity investment in BPSL," the charge sheet said.
Singal was arrested on November 22 last year under the Prevention of Money Laundering Act (PMLA) after he was questioned in connection with the case.