Corporate Affairs Ministry wants SFIO to share Bhushan Steel report with CBI

MUMBAI: The ministry of corporate affairs (MCA) has directed its Serious Fraud Investigation Office (SFIO) to make a detailed reference to the Central Bureau of Investigation (CBI) indicating the names of all bank officials who were prima facie involved in the Bhushan Steel (BSL) case. This, after the probe into the affairs of BSL has purportedly revealed that banking fraud was committed by ‘suppressing material facts’ to the Reserve Bank of India (RBI).The ministry has also ordered the SFIO to share the report with the Department of Financial Services (DFS) so that the ministry can initiate disciplinary action against the bank officials responsible for management fraud, the order reviewed by ET reads.70082740 The order has also recommended that SFIO initiate action for disgorgement of assets of accused ex-promoters — Brij Bhushan Singal and Neeraj Singal — and their associated companies by initiating proceedings before NCLT and seek interim orders for freeze on movable and immovable properties including bank accounts/lockers and jointly held properties including lockers and final relief for disgorgement of frozen assets against all the accused expromoters, directors, statutory auditors and bankers.Earlier this week, the SFIO filed a 70,000-page chargesheet against 284 individuals and entities including nine bankers — three officials from the State Bank of India (SBI) and six from the UCO bank — for allegedly failing to raise red flags and causing loss of public funds. The probe has revealed that the BSL opened letter of credits (LCs) and submitted fake documents through which it managed to divert public funds of Rs 45,818 crore between 2013-14 and 2016-17.The order states that the RBI had asked BSL to conduct a forensic audit, however, the banks submitted their responses to RBI seeking closure of forensic audit allegedly by suppressing material facts.

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