Sanjay Singal, the Chairman and Managing Director of Bhushan Power and Steel Ltd (BPSL), allegedly transferred money to shell companies under the guise of buying capital goods, then either routed the money back to BPSL as equity so as to borrow more money from banks or laundered it to buy property according to a charge sheet filed by the Enforcement Directorate against him and 24 others by the Enforcement Directorate on Friday.
Singhal bought a house in one of the most expensive apartment buildings in the world, One Hyde Park, in Knightsbridge, London worth Rs 162 crore and another in Delhi’s posh Jor Bagh for Rs 74 crore using laundered money, ED claimed.
ED’s special prosecutor Nitesh Rana informed the court while filing the charge sheet that Sanjay Singal was the “mastermind” behind diversion of loans taken from various banks by “dressing up” the books of accounts of BPSL. Singal and BPSL are being investigated by the Central Bureau of Investigation and ED since July last year for allegedly diverting funds taken from banks. The company borrowed Rs 47,204 crore between 2007 and 2014 from 33 banks.
The charge sheet, a copy of which has been seen by HT, said Singal diverted bank loans worth Rs 136.92 crore from BPSL to another entity controlled by him, M/s Atma Ram House Investment Pvt Ltd (AHIPL) as an “unsecured loan” which he used to buy a house at 53, Jor Bagh in 2011; he lives there with his family.
Advocates Vijay Aggarwal and Mudit Jain, who appeared for Singal, declined comment. ED has not named his wife Aarti Singal in the chargesheet. She was earlier named as accused in the CBI FIR.
Detailing how Singhal acquired the London property, the ED charge sheet said: “Not only in India, Sanjay Singal was also able to create assets in foreign countries by adopting the same modus operandi. Funds worth Rs 118 crore were diverted from BPSL either directly or through shell companies to three companies controlled by him, Aarti Iron and Power Private Ltd, Titanic Steel Industries Pvt Ltd and Vintage Steel Private Ltd, which in turn transferred these funds as equity infusion in a foreign company, Aarti Steel Gulf FZCO.”
“Aarti Steel again transferred these funds to another subsidiary, Avantika Global Pvt Ltd as equity investment, which used these funds towards acquisition of a residential apartment in one of the most posh locality of London (UK) – Apartment A.03.2 One Hyde Park – for an amount of GBP 2,02,04,433 (equivalent to Rs 162.344 crore at the then prevailing exchange rate”, the charge sheet added. Residences at One Hyde Park are owned by members of royal families from Arab countries and the ultra rich from other parts of the world.
In all, the agency said in its charge sheet that it has established diversion of funds of around Rs 4,025 crore by Singal using different modus operandi . For example, he routed money purportedly to buy capital goods, whereas no actual movement of goods took place. The cash so generated was laundered.
The ED charge sheet said that there was capital infusion of Rs 3,330.09 crore in BPSL between 2011-12 and 2016-17 by promoter companies, Jasmine Steel Trading Ltd, Marsh Steel Trading Ltd, Diyajyoti Steel Ltd and Vision Steel Ltd, which received these funds from shell companies either as equity or debt. The same money that was initially transferred from BPSL was introduced as equity in BPSL by these four promoter companies the charge sheet adds. The fresh equity allowed Singhal to take fresh loans from banks, the charge sheet added.
Last October, ED attached the entire plant of BPSL worth Rs 4,025 crore in Odisha’s Sambalpur. The attachment was released by National Company Law Tribunal within few days but the agency has challenged the NCLT order.