Page 14 - Banking Finance September 2018

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SFIO Arrests Bhushan Core Sector Growth at 7-Month High
Steel's Promoter The country's infrastructure growth rate shot up to a seven-month high of 6.7
per cent in June, according to government data. The
The Serious Fraud Investigation Of-
fice has arrested expansion came on the back of a double digit growth in
Bhushan Steel's erst- cement, petroleum products and coal which expanded
while promoter by 13.2 per cent, 12 per cent and 11.5 per cent respec-
tively compared to June last year.
Neeraj Singal for al-
legedly siphoning off The growth in output compares with an upwardly revised 4.3 per cent year-
funds worth over Rs 2,000 crore, onyear growth in May. During April-June, the growth rate now works out to 5.2
according to officials. This is the first per cent over the same period of the previous year. Infrastructure output, which
time that the SFIO has arrested a comprises eight sectors that also include crude oil and electricity, accounts for
person for fraudulent activities, a nearly 40 per cent of the country's industrial output.
senior official told.
Panel to look into issues of stressed assets in the
The probe agency, which comes un-
der the Corporate Affairs Ministry, power sector
got powers to arrest people for vio- The Centre has formed a high-level empowered committee to look into issues
lations of companies law last year. that have contributed to the stress in the power
The finance ministry said Singal is sector. An official statement said this committee
"accused to be guilty of siphoning off will propose solutions to prevent these assets
funds of over Rs 2,000 crore from the from becoming non-performing assets. The Com-
loans availed by Bhushan Steel Lim- mittee will be headed by the Cabinet Secretary
ited using more than 80 companies". with representatives from the Ministry of Rail-
The companies were used for ways, Ministry of Finance, Ministry of Power,
fraudulent activities of rotation of Ministry of Coal and lenders having major exposure to the power sector.
funds through bogus loans and ad- "Stressed thermal power assets are a cause of concern for the country…The
vances, and investments, among oth-
ers, it said in a tweet. "Bhushan Steel Committee would look into the various issues with a view to resolve them and
Limited is one of the 12 big cases that maximise the efficiency of investment," a Power Ministry statement said.
had been referred for insolvency "This includes changes required to be made in the fuel allocation policy, regula-
resolution by banks. Tata Group has tory framework, mechanisms to facilitate sale of power, ensure timely payments
taken-over management of the com- ... changes required in the provisioning norms/Insolvency and Bankruptcy Code,
pany from the Singals. SFIO investi- Asset Restructuring Company Regulations and any other measures proposed for
gation is on-going," it said. revival of stressed assets so as to avoid such investments becoming NPA," it added.

14 | 2018 | SEPTEMBER | BANKING FINANCE