A Delhi court on Friday remanded Nittin Johri, the former CFO and Whole Time Director of Bhushan Steel Limited (BSL), to two-day custody of Serious Fraud Investigation Office (SFIO) in connection with the ongoing investigations against the company.
Johri, who was granted SFIO custody by Patiala House Court, was arrested on Thursday, official sources said.
According to the sources, Johri, as ex-CFO of BSL, was managing the affairs of the firm and looking after inter alia the affair of raising of funds from various banks/financial institutions. He was one of the signatories to the financial statements of BSL till FY 2016-17 and was also a member of the "Committee of Board of Directors on Borrowing, Investment and Loans" of BSL along with Brij Bhushan Singal and Neeraj Singal.
Investigation has revealed that there were several fraudulent practices carried out in BSL, including manipulations in the accounts and financial statements of the company during Johri's term as CFO and Whole Time Director of BSL, including maintaining inflated inventories for availing enhanced working capital.
Sources said Johri was one of the prime perpetrators of the fraudulent arrangement of manipulations through the instrument of LCs by filing false documents with various banks. A large number of LCs, amounting to more than Rs. 20,000 crore were opened using false documents on behalf of BSL over a period of time starting from F.Y 2014-15.
By way of the said modus operandi, sources said BSL inter alia availed working capital to avoid getting their loan/credit accounts declared as NPAs by banks. LCs worth more than Rs. 3000 crore were finally devolved, sources mentioned.
The development comes over a week after the Central Bureau of Investigation (CBI) issued a lookout notice against Sanjay Singhal and Aarti Singhal in connection with the case.
CBI has accused Singhal and others of availing loans from 33 banks and financial institutions from 2007 to 2014 and defaulting on payments worth over Rs 2,000 crore. They have also been accused of fraudulently diverting a huge amount of bank funds through shell companies.
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