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PNB reports over ₹3800 crore fraud by Bhushan Power & Steel

The exposure of ₹3,800 crore includes domestic exposure of ₹3,191 crore, overseas exposure of $49.71 million at the bank's Dubai branch and $38.51 million at its Hong Kong branch
  • PNB said the company misappropriated bank funds and manipulated books to raise funds from consortium lenders
  • The bank is already recovering from the Nirav Modi scam, where it was defrauded of  ₹11,400 crore (Mint file)Premium
    The bank is already recovering from the Nirav Modi scam, where it was defrauded of 11,400 crore (Mint file)

    Mumbai: Punjab National Bank on Saturday said it has detected a fraud of 3,805.15 crore by Bhushan Power & Steel Ltd and has reported it to the Reserve Bank of India.

    The exposure of 3,800 crore includes domestic exposure of 3,191 crore, overseas exposure of $49.71 million at the bank's Dubai branch and $38.51 million at its Hong Kong branch.

    PNB said the company misappropriated bank funds and manipulated books to raise funds from consortium lenders.

    "On the basis of Forensic Audit Investigation findings and the CBI filing an FIR on a suo moto basis, against the company and its directors, alleging diversion of funds from the banking system, a fraud of 3,805.15 core is being reported by the bank to the RBI," the bank said.

    The state-owned bank also said that it has made provision of 1,932.47 crore against this account.

    BPSL is one of the 12 accounts identified by the RBI for insolvency proceedings. JSW Steel has offered to pay 19,350 crore to financial creditors, which implies a haircut of around 60% for lenders.

    The state-owned bank reported the fraud at a time when it is already recovering from the Nirav Modi scam, where it was defrauded of 11,400 crore.

    ABOUT THE AUTHOR
    Gopika Gopakumar
    Gopika Gopakumar has worked for over 15 years as a banking journalist across print and television media. Her expertise lies in breaking big corporate stories and producing news based TV shows. She was part of the 2013 IMF Journalism Fellowship Program where she covered the Annual & Spring meetings of the International Monetary Fund in Washington D.C. She started her career with CNBC-TV18, where she also produced a news feature show called Indianomics and an award winning show on business stories from South India called Up South. She joined Mint in 2016.
    Catch all the Industry News, Banking News and Updates on Live Mint. Download The Mint News App to get Daily Market Updates.
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    Updated: 06 Jul 2019, 09:18 PM IST
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