Nittin Johari, the former CFO and whole time director of Bhushan Steel has been remanded to two days custody of Serious Fraud Investigation Office (SFIO) by the Metropolitan Magistrate at Patiala House Court, New Delhi on May 3. He was arrested by the investigating agency on May 2 in connection with alleged fraudulent practices carried out at Bhushan Steel.
Johari was managing the process of funds being raised by Bhushan Steel from banks and financial institutions. He was one of the signatories to the financial statements of the company until FY2016-17 and was a member of the Committee of Board of Directors on Borrowing, Investment and Loans along with Brij Bhushan Singal and Neeraj Singal.
Now, investigations revealed that there were several fraudulent practices carried out at Bhushan Steel, including manipulation of accounts and financial statements during his term. He has been accused of inflating inventories to avail excess working capital.
He is accused of being the prime perpetrator who manipulated letters of credit (LCs) by filing false documents to avail funds from various banks. A large number of LCs were used to get approximately Rs 20,000 crore using false documents on behalf of Bhushan Steel between FY2014-15.
Bhushan Steel allegedly availed working capital to avoid getting loan/credit accounts declared as NPAs by banks. LCs worth more than Rs 3000 crore were later devolved.