SC grants bail to ex-promoter of Bhushan Steel in ₹46,000 cr bank fraud case

The Supreme Court granted bail to former managing director of Bhushan Steel, Neeraj Singal, in a money laundering case arising from an alleged bank fraud amounting to ₹46,000 crore, on Friday

A bench that comprised Justices Sanjiv Khanna and Sanjay Kumar noted that Neeraj Singal had been in jail for 16 months and that the trial was unlikely to conclude soon. They ruled in Singal's favour, considering the prolonged detention and the indefinite duration of the trial.

The bail was granted on account of specific terms and conditions that were to be set by the trial court. Singal is required to surrender his passport and must obtain court permission to leave India. The Bench emphasised that any violations of the bail conditions would allow the prosecution to seek the recall of the bail order.

During the proceedings, Justice Khanna reportedly expressed concern about the broader impact of Singal's alleged actions, stating that such fraud undermines market confidence and affects the entire economy.

Singal's bail plea was an appeal against the Delhi High Court's January 8 ruling, which had dismissed his request for bail and his challenge against the Enforcement Directorate's (ED) arrest. The ED had argued that Singal's involvement in a major banking fraud had resulted in a loss of over ₹46,000 crore in public funds.

The Directorate had alleged that Brij Bhushan Singal and Neeraj Singal, former promoters of Bhushan Steel and Bhushan Energy, orchestrated a complex scheme involving over 150 shell companies to siphon off funds from their now-defunct businesses. According to the ED, this illicit operation resulted in financial losses amounting to ₹11,446.73 crore, which it claims are proceeds of crime. The syphoned funds were reportedly used to purchase preference shares in Bhushan Steel Ltd and acquire properties through the companies controlled by the Singals. The ED's investigation revealed that many employees of the group were appointed as directors of these shell companies, facilitating the money laundering process.

The ED's provisional attachment order, dated March 9, 2024, detailed that assets worth approximately ₹429 crore had been attached in connection with the case. This included ₹367.83 crore attached in March, with movable properties valued at ₹25 crore and immovable properties at ₹342 crore. The agency's probe uncovered that the Singals allegedly diverted ₹48.38 crore from Bhushan Steel Ltd into foreign companies based in Dubai, Mauritius, Ethiopia, and Nigeria. The funds were then reinvested in various mutual funds and NBFCs under the Singal family's control, further complicating the money laundering web.