ED Freezes ₹486-Crore Bungalow in Delhi Over Alleged Bank Fraud Case

The Enforcement Directorate (ED) has provisionally attached a lavish residential property worth ₹486 crore located in Amrita Shergill Marg, one of the most affluent neighborhoods in Delhi, as part of its ongoing investigation into a bank fraud-linked money laundering case. The case revolves around the erstwhile Bhushan Power and Steel Limited (BPSL) and its promoters.

Key Details of the Attachment

The sprawling mansion, spread over approximately one acre in central Delhi, is registered under the ownership of Aarti Singal, a former director of BPSL and the wife of Sanjay Singal, the company's primary promoter. The attachment was executed under the provisions of the Prevention of Money Laundering Act (PMLA), and the property has been provisionally frozen by the ED.

The Background of the Case

BPSL was once a significant player in the steel industry but faced financial troubles that led to its insolvency proceedings. The company was eventually acquired by JSW Steel. Sanjay Singal, the primary accused, was arrested in November 2019, and a trial against him and other alleged culprits is ongoing.

The origins of the case lie in a First Information Report (FIR) filed by the Central Bureau of Investigation (CBI), which alleged that the former owners of BPSL "cheated" banks of ₹47,204 crore. The ED's investigation revealed that BPSL and its promoters had misappropriated bank funds by diverting them to private investments, including shares and properties.

The Allegations

According to the ED, the financial irregularities included:

1. Fudging of Financial Records: The books of accounts were manipulated to reflect fake expenses, purchases, and capital assets.

2. Cash Mismanagement: Bank funds were allegedly withdrawn in cash and used to acquire assets in the names of family members.

3. Creation of Benami Companies: Funds were funneled into shell companies beneficially owned by the promoters. These companies were used to make investments in shares and immovable properties.

4. Evasion of Loan Recovery: Assets were reportedly acquired and concealed in a manner that made it difficult for banks to recover the outstanding loans.

Previous Developments

This attachment is part of a broader investigation into BPSL's financial misconduct. To date, the ED has attached properties worth ₹4,938 crore in this case. Of this amount, assets valued at ₹4,025 crore have been restituted to banks under the provisions of the PMLA, providing some relief to financial institutions impacted by the alleged fraud.

A Widening Web

The ED stated that the funds dissipated by BPSL's promoters were used to amass significant private wealth while evading bank recovery mechanisms. The agency's findings underscore the misuse of public money intended for corporate development, which was instead diverted to fund personal luxuries.

The Road Ahead

As the investigation deepens, the spotlight remains on the alleged systemic abuse of financial channels by corporate entities and their promoters. With the trial against Sanjay Singal and other accused still underway, the ED continues its efforts to trace and recover misappropriated assets.

This case serves as a stark reminder of the consequences of financial misconduct and the robust mechanisms in place to hold offenders accountable under Indian law.