NEW DELHI: A local court on Friday granted bail to the former chairman of Bhushan Power & Steel Ltd (BPSL), Sanjay Singal, who is accused of financial irregularities and money laundering.
While granting bail, the court recorded differences between details of the probable and actual proceeds of crime submitted by the Enforcement Directorate (ED). Singal was arrested on November 23. The court had denied him bail last month.
“When the first bail application was dismissed, there was a possibility that the investigation may result in proceeds of crime to the extent of Rs 27,704 crore. At that time the submission made was that the total loan amount defaulted by M/s BPSL was Rs 47,204 crore and the offer by M/s JSW Steels was Rs 19,500 crore, giving apprehension that the proceeds of crime was Rs 27,704 crore,” the order reads.
“Now the ED has restricted the proceeds of crime to Rs 4,229 crore,” the court said, while adding that though this amount was far less than the amount indicated initially, “even this amount is not a small amount”.
But this is a factor in favour of the accused, it said, while noting that “the trial is not going to end soon”.
Singal’s counsel Vijay Aggarwal told the court that as against Rs 2,348 crore taken out of the company, an investment of Rs 3,330.09 crore was made, which showed the bona fides of Singal.
Granting bail to Singal, the court said “Though, there may not be any financial loss in strict sense … for this dubious device followed by the company, they would face the consequence at the end of the trial.”
Special public prosecutor Nitesh Rana, appearing for the ED, opposed the bail plea arguing that Singal was “mastermind” and the “main beneficiary” of the offence. “For economic offences, jail and not bail is the rule,” he said, adding that it was a case of “circular transaction”.
Defence counsel Aggarwal, during his arguments, referred to a report prepared by the company’s interim resolution professional, Mahender Kumar Khandelwal, opining that its assets were not less than Rs 41,000 crore. The company was placed under bankruptcy law after it defaulted on repayment on dues to lenders.
Aggarwal said in such instances, the value of assets gets depressed and that was the reason the offer from JSW Steel was worth only Rs 19,500 crore.
The judge said “the common case of the parties is that for improving debt-equity ratio, the company has resorted to taking the money of the company and routing back through various channels as equity of the accused and his family members so that they continue to get financial support of the banks. The submission is made to show that money was not swindled by the accused, but was re-routed in the company for the larger interest of the company itself”.
It added: “Although the character of the funds of the company changed from the assets of the company to the equity of shareholders, nevertheless, the sum result is that the funds have been pooled in the company and not taken away.”
Source: Economic Times
