Fraud case: SC quashes Delhi HC bail order for Bhushan Steel ex-CFO Nittin Johari

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Updated: September 13, 2019 1:06:05 AM

A bench headed by Justice NV Ramana cancelled the bail granted to Johari, who is a co-accused in the Bhushan Steel case, on an appeal by the SFIO challenging the August order of the HC.

Fraud case, Supreme Court, Supreme Court of India, Bhushan Steel, Delhi HC, Nittin JohariThe SFIO had arrested Johri on May 2 on the grounds that he was managing the affairs of Bhushan Steel and was looking after raising of funds from banks.

The Supreme Court on Thursday quashed the Delhi High Court order that granted bail to Bhushan Steel’s former chief financial officer Nittin Johari, who was arrested by the Serious Fraud Investigation Office (SFIO) for alleged fraudulent activities, including filing false documents with various banks. A bench headed by Justice NV Ramana cancelled the bail granted to Johari, who is a co-accused in the Bhushan Steel case, on an appeal by the SFIO challenging the August order of the HC.

The SFIO had arrested Johri on May 2 on the grounds that he was managing the affairs of Bhushan Steel and was looking after raising of funds from banks and financial institutions and was also one of the signatories to the financial statements of the company till fiscal year 2016-17. The SFIO probe found that there were several fraudulent practices at the company.

These included manipulations in the accounts and financial statements during the term of Johri, who was a whole-time director of the company. These included maintaining inflated inventories for availing enhanced working capital.

It was also alleged that he was also one of the perpetrators of manipulations through the instrument of Letters of Credit (LCs), which was done by filing false documents with various banks.

A large number of LCs, amounting to more than Rs 20,000 crore, were opened usings false documents on behalf of the company over a period of time starting from fiscal 2014-15.

By way of the said modus operandi, Bhushan Steel availed working capital to avoid getting their loan/credit accounts declared as non-performing assets by the banks. LCs worth more than Rs 3,000 crore finally devolved, they said.

It was also alleged that Johri was a member of the committee of board of directors on borrowing, investment and loans along with former promoters Brij Bhushan Singal and Neeraj Singal.

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