As per report the Punjab National
Bank (PNB) on Saturday said it had reported a borrowing fraud of Rs 38.05
billion ($556 million) in bhushan Power & Steel Ltd's account to the
Reserve Bank of india (RBI). Meanwhile the fraud, "alleging diversion of
funds from the banking system", was being reported to the RBI on the basis
of the findings of the forensic audit and the federal police filing a first
information report, the PNB said in a statement to stock exchanges.
PNB said "It has been observed that the company has misappropriated bank
funds, manipulated books of accounts to raise funds from consortium lender
banks", adding that it had already made provisions of 19.32 billion rupees
in Bhushan's account.
Moreover PNB has been defrauded of over $2 billion in a separate scam that came
to light last year. Apparently bhushan Power and Steel, one of india's most
indebted companies, was among the first 12 companies referred by the RBI india
to a bankruptcy court for a debt resolution process under india's new
insolvency law. Perhaps the company could not be reached for comment on the PNB
statement.
