In fresh troubles for crisis-hit Bhushan Steel, four members of its promoter family, including chairman as well as managing director, figure among 260 entities barred by Sebi for suspected money laundering and tax evasion activities through stock markets.
Those barred by Sebi include the company chairman Brij Bhushan Singal, his son and manging director Neeraj Singal, as also their respective spouses Uma Singal and Ritu Singal.
All four of them were allotted shares on preferential basis by Radford Global and First Financial — the two firms at the centre of a massive Sebi crackdown on misuse of this route of share allotment to launder money and avoid taxes.
While further probe is continuing by Sebi along with other agencies such as the Income Tax Department, the Enforcement Directorate and the Financial Intelligence Unit, all the 260 entities, including four from the Singal family, have been barred from all kinds of dealings in securities markets till further directions through an interim order.
No reply was available to queries made to Bhushan Steel, which is already in the dock for ‘cash-for-loan’ scam. It is facing CBI probe in relation to alleged bribing of top officials at public sector banks pertaining to their huge loans amounting to over Rs 40,000 crore.
In its orders, Sebi last Friday said that the modus operandi of the barred entities typically involved stock market dealings aimed at evading long-term capital gains tax and showing the source of income as legitimate from stock markets.
“…the schemes, plan, device and artifice employed in this case, apart from being a possible case of money laundering or tax evasion which could be seen by the concerned law enforcement agencies separately, is prima facie also a fraud in the securities market in as much as it involves manipulative transactions in securities and misuse of the securities market,” the regulator said.
With regard to First Financial, Sebi said that several preferential allottees such as those belonging to the Singal family indirectly received the funds back from the company in the name of investment by First Financial or otherwise.
“One such instance…is where Rs 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 indicate that money received through preferential allotment were again routed to the same source ie Singal family. Inquiry also revealed that members of Singal family have been preferential allottees in such type of companies which have a history similar to that of First Financial,” Sebi said in its order dated December 19.