Punjab National Bank reports $755m fraud, Latest Business News - The New Paper

Punjab National Bank reports $755m fraud

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MUMBAI India's state-run Punjab National Bank (PNB) on Saturday said it had reported to the country's central bank a borrowing fraud of 38.05 billion rupees (S$755 million) in Bhushan Power & Steel's account.

The fraud, "alleging diversion of funds from the banking system" was being reported to the Reserve Bank of India (RBI) on the basis of the findings of forensic audit and the federal police filing a first information report, PNB said in a statement to stock exchanges.

"It has been observed that the company has misappropriated bank funds, manipulated books of accounts to raise funds from consortium lender banks," PNB said, adding it had already made provisions of 19.32 billion rupees in Bhushan's account.

PNB has been defrauded of over US$2 billion (S$2.7 billion) in a separate scam that came to light last year.

Bhushan Power and Steel, one of India's most indebted companies, was among the first 12 companies referred by the RBI to a bankruptcy court for a debt resolution process under India's new insolvency law.

The company could not be reached for comment on the PNB statement. - REUTERS