MUMBAI India's state-run Punjab National Bank on Saturday said it had reported to the country's central bank a borrowing fraud of 38.05 billion rupees 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 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.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.