BPSL Fraud: Aarti Singal was aware that goods pledged as surety to banks were sold in open market

The Serious Fraud Investigation Office (SFIO) on Tuesday told a Delhi court that Aarti Singal, who was vice chairperson of Bhushan Power & Steel Ltd (BPSL), along with husband Sanjay Singal had siphoned off funds by duping banks to buy residential properties in Mumbai and Delhi.

The agency that probes corporate fraud claimed this while seeking custody of Aarti Singal, who was arrested on Monday. The court sent her and three others arrested in the case to SFIO’s custody for two days.

When the Singals were at the helm, goods worth Rs 1,023 crore that were lying in the plants of BPSL were sold in the open market, but the proceeds were not shown in the accounts of the company, the SFIO claimed in the court. “This caused a wrongful loss to BPSL and resultantly led to enrichment of persons controlling and managing the affairs of BPSL.”

BPSL had a liability of Rs 37,000 crore towards banks and other financial institutions. The goods which were allegedly removed from the plant were security for these loans.

In March last year, JSW Steel acquired BPSL after a bankruptcy resolution process that lasted three-and-a-half years. However, probe agencies including the SFIO, CBI and the Enforcement Directorate continue their investigation against BPSL’s former promoters over the alleged irregularities.

Aarti Singal, the SFIO told the court, was a director of BPSL between 2006 and 2019 and a signatory along with her husband in the bank accounts of BPSL and 30 associated companies. She was “involved in and part of all the fraudulent activities undertaken by the company”, the agency said in its application, which ET has accessed.

According to the agency, its investigation had revealed that BPSL allegedly diverted funds to paper companies as share capital and diverted those for the purchase of shares or assets in the name of Sanjay Singal and his family members. Bogus long-term capital gains of Rs 1,084.93 crore were availed of by Singal and his family members between 2009 and 2017, it said.

Aarti Singal was also a signatory to these paper companies in which the funds were transferred. It was on her instructions to banks that payments were made to bogus suppliers through which funds were siphoned off, the agency claimed.

The couple purchased a property in an upmarket Southcentral Mumbai locality for Rs 167.75 crore through a paper firm, Assurity Real Estate, which had no funds to purchase it, the agency claimed. Another residential property on Delhi’s Amrita Shergill Marg was purchased by taking a housing loan of Rs 60 crore from Bank of Maharashtra and repayment of this loan was done through siphoning funds from a cash credit account of the company at Punjab National Bank, it said.

Singal’s advocate, Vijay Aggarwal, argued that since the investigation had been underway since 2017 and the applicants had not evaded or failed to furnish any information demanded, custodial interrogation wasn’t required.

In a first, the special court has allowed defence counsel Aggarwal's plea permitting the accused to have their counsel present at a visible distance with a glass partition from where the proceedings can be watched from a distance without interference.

The court has also allowed prayers for medicine, home cooked meals and meeting one lawyer for 45 minutes or 15 minutes to relatives and 30 minutes to lawyers on each day.

Source - https://economictimes.indiatimes.com/news/india/bpsl-fraud-aarti-singal-was-aware-that-goods-pledged-as-surety-to-banks-were-sold-in-open-market/articleshow/90387732.cms