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Bhushan Steel Promoters Banned From Markets in SEBI’s First Financial Money Laundering Order


The SEBI Investigation on First Financial, where it found more than 150 entities involved in rigging share prices up to evade tax and launder money, has snared another victim: the promoters of the beleaguered Bhushan Steel.

After having its director arrested for attempting to bribe a bank chief, and banks finding that the company owes them 36,000 cr., the company has a new challenge.

Read: All you wanted to know about the Bhushan Steel situation.

A recent SEBI order has found many entities guilty of participating in fraudulent price rigging of share prices of a company named First Financial (whose promoters were also involved). The entities were involved in potential tax evasion and money laundering. The order names the Bhushan Steel promoters as part of those that were involved as well, says Business Standard.

We wrote about the interim order for First Financial. The order names them as an example:

It is also pertinent to mention that several preferential allottees such
a those belonging to the Singal family, namely Brij Bhushan Singal, Neeraj Singal, Ritu Singal and Uma Singal (who were allotted 7,50,000 shares by First Financial at a cost price of ₹ 1.5 crore) indirectly received the funds back from First Financial in the name of investment by First Financial or otherwise.. One such instance (mentioned in the above Table)
is where ₹ 1.5 crore have been transferred to Marsh Steel Trading Ltd and Vision Steel Ltd for the purpose of investment as indicated in Annual Report of FY 2011-12 whose promoters are Singal family. Thus the above events prima facie indicates that money received through preferential allotment were again routed to the same source i.e. Singal family.

(Emphasis mine)

The Bhushan Steel stock is not impressed:


The stock trades at 87.5, down 2% as we speak.

Why is this relevant? The market cap of the company is Rs. 2000 cr. , and the promoter stakes are falling, as lenders invoke promoter pledges on shares. The promoters can now no longer buy more stock – they are now banned. This looks like a train wreck in slow motion, and more so for the banks that are owed the Rs. 36,000 cr. (SBI, etc.). Watch this space.


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