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Punjab & Sind Bank flags Rs 238 crore fraud in Bhushan Power account

Punjab & Sind Bank (PSB) said on Wednesday it has reported a Rs 238 crore ($34.58 million) fraud to the country’s central bank, relating to allegations of diversion of funds by the indebted Bhushan Power & Steel Ltd.

Earlier this month, Punjab National Bank (PNB) said it had reported a borrowing fraud of Rs 3805 crore in Bhushan Power’s account to the Reserve Bank of India (RBI).

Both these banks are among a host of financial creditors who have claimed a collective Rs 47,303 crore from Bhushan Power, which the RBI referred to a bankruptcy court in 2017.

It has been observed that the company has misappropriated bank funds, manipulated books of accounts to raise funds from the consortium of lenders, New-Delhi based PSB said in a statement on Wednesday.

The case is currently at the country’s company law tribunal and the bank expects good recovery, it said.

State-owned PSB also said it has made provisions amounting to Rs 189 crore relating to its exposure to the Bhushan Power account.

Source: Business Standard