Bhushan Steel bank 'fraud' case: Delhi HC seeks accused's reply to ED's plea challenging bail

The Delhi High Court sought the response of an accused on Tuesday on a plea moved by the Enforcement Directorate (ED) challenging the bail granted to her by a trial court in a bank fraud-linked money-laundering case against the erstwhile Bhushan Steel Limited (BSL).

The amount involved in the alleged bank-loan fraud is more than Rs 46,000 crore.

Justice Swarana Kanta Sharma issued a notice to Archana Ajay Mittal, the sister of the company’s former promoter, Neeraj Singal, on the ED’s plea and asked her to file a reply within three weeks.

The court listed the matter for further hearing on July 11.

During the brief hearing, the ED’s counsel submitted that the agency has challenged the trial court’s February 14 order granting bail to Archana Mittal and sought the cancellation of her bail.

The agency’s counsel contended that there were several erroneous findings in the trial court’s order.

The trial court granted bail to Archana Mittal on February 14 on a personal bond of Rs 10 lakh with one surety of the like amount and directed her not to leave the country without the court’s prior permission.

The federal agency has alleged that the company obtained loans from various banks and financial institutions and as on March 31, 2017, had an outstanding liability of Rs 46,646.73 crore.

According to the ED, Archana Mittal and her husband Ajay Mittal knowingly received proceeds of crime to the extent of Rs 70 crore.

They also mortgaged a property of BSL and routed the funds to Singal’s family, it has alleged.

Ajay Mittal and Singal are currently in judicial custody.

Singal was arrested by the ED after it raided him in June last year. A chargesheet under various sections of the Prevention of Money Laundering Act (PMLA) was filed against him and others in August last year. Archana Mittal’s bail plea had claimed that she was neither a director nor a promoter-member nor an employee of BSL.

The agency had opposed the application, claiming that she played a ”pivotal role” in the commission of money laundering.

After the completion of the corporate insolvency resolution process, BSL was taken over by Tata Steel Limited in 2018.

According to the ED, Singal and his associates formed several shell companies, and the promoters and entities linked to BSL ”rotated funds from one company to another through a chain of multiple entities” as part of the alleged bank-loan fraud.

The money-laundering case stems from a chargesheet filed by the Serious Fraud Investigation Office (SFIO), an agency functioning under the Ministry of Corporate Affairs.

The ED has alleged that funds were circulated to infuse capital, buy property and for other personal purposes not intended by the banks.

The promoters, directors and officials of BSL prepared ”forged” documents and made fraudulent representations before the banks to discount letters of credit and ”diverted” the funds back to their own companies with mala-fide intentions, it has said.