State-owned lender Allahabad Bank on Saturday reported a major alleged fraud by bankrupt steelmaker Bhushan Power & Steel Limited. Allahabad Bank had identified a fraud of Rs 1,774.82 crore in Bhushan’s accounts, the lender told the Reserve Bank of India, The Hindu reported.
“It has been observed that the company has misappropriated bank funds, manipulated books of accounts to raise funds from consortium lender banks,” Allahabad Bank said in a statement. “At present, the case is at NCLT [National Company Law Tribunal] which is in advance stage and the Bank expects good recovery of the account.” The bank said it has already made a provision of about Rs 890 crore against the exposure.
Allahabad Bank is the second lender after Punjab National Bank to report an alleged fraud by Bhushan Power & Steel. On July 6, the Punjab National Bank said it had reported a borrowing fraud of Rs 3,805 crore by Bhushan Power & Steel Limited to the RBI.
Bhushan Power & Steel defaulted on Rs 47,700 crore worth of loans in 2017, and was one of the 12 companies referred for resolution under the Insolvency and Bankruptcy Code.