Five people were taken into custody by the Directorate of Enforcement (ED) on January 11, 2024, under the PMLA, 2002, in relation to the money laundering investigations against Bhushan Steel Limited for bank fraud of Rs. 56,000 crore. The arrested persons are Ajay Mittal [brother-in-law of promoter Neeraj Singal], Archana Mittal [wife of Ajay Mittal and sister of Neeraj Singal], Nittin Johari [the then CFO of Bhushan Steel], Pankaj Kumar Tewari [the then Vice President, Banking] and Pankaj Kumar @ Pankaj Agarwal [the then Vice President, Accounts].
Based on the Prosecution Complaint against Bhushan Steel Limited submitted by the Serious Fraud Inquiry Office [SFIO], the ED began an inquiry. The PMLA Act’s scheduled offences were mentioned in the aforementioned complaint.
According to an ED probe, a number of shell companies were established by the former managing director of Bhushan Steel Limited [BSL], Neeraj Singal, and his accomplices. They moved money around among several companies by way of a system of intermediaries. The money was used for a variety of non-banking personal uses, including purchasing real estate, injecting capital, and other expenses.
Further investigations showed that promoters/directors and BSL officials had generated false paperwork, deceived banks into discounting LCs, and redirected the money into their own businesses with dishonest intent. Money was stolen in opposition to the false leases that were made in support of JSW Steel Limited and Hindustan Zinc Limited. The State Bank of India and Punjab National Bank suffered unlawful losses as a result of the plundered monies being transferred to other groups or affiliated firms.
Prior to this, on November 8, 2021, the ED had temporarily attached assets valued at Rs 61.38 crores. On July 24, 2022, the Adjudicating Authority subsequently affirmed the preliminary attachment order.
Neeraj Singal was the subject of a search operation on 09-06-2023, and the ED apprehended him the same day. Neeraj Singal is now in judicial custody. On August 8, 2023, a prosecution case was filed against him and the other accused parties, and on July 11, 2023, the Honorable PMLA court granted cognizance.
On October 13, 2023, a second search operation was carried out in relation to certain BSL individuals who were instrumental in bank fraud. During the aforementioned search, valuables and important digital evidence were found.
Both Ajay and Archana Mittal knowingly accepted Rs. 70 crore as profits from criminal activity. Additionally, they mortgaged BSL’s property and sent the money to Neeraj Singal’s family. Nittin Johari, Pankaj Kumar Tewari and Pankaj Kumar @ Pankaj Agarwal are ex-employees of BSL who were the principal ones in charge of accounts and financial operations. The aforementioned three individuals serve as directors for a number of paper firms that Neeraj Singal manages to rotate funds.
In order to acquire loan monies, they also falsified paperwork and other information to be sent to the bank, manipulating the BSL accounts. They then took a proactive role in diverting bank monies.
The detained individuals appeared before the PMLA’s Honorable Special Court on January 11 and 12, 2024. ED was given detention by the Honorable Court for three days. Additional research is underway.
