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PNB Shares Slump On Detecting Another Fraud

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On Monday, shares of Punjab National Bank (PNB) slipped by close to 8 percent after the lender reported that another fraud related to accounts of Bhushan Power & Steel Ltd at its Chandigarh, Dubai and Hong Kong branch with an exposure of over Rs 3,800 crore.

PNB Shares Slump On Detecting Another Fraud
 

On Saturday, the lender in a regulatory filing to the exchanges reported a "Borrowal Fraud of Rs.3805.15 crore in NPA account of M/s Bhushan Power & Steel Ltd. (BPSL) {including domestic exposure of Rs.3191.51 crore at Large Corporate branch at Chandigarh, Zonal Office, Chandigarh, overseas exposure of USD 49.71 mio (Approx. Rs.345.74 crore) at Dubai branch and USD 38.51 mio (approx. Rs.267.90 crore) at Hong Kong)."

Shares of PNB fell by 7.5 percent to Rs 75.70, its biggest fall since 13 May.

The filing further said, "On the basis of Forensic Audit Investigation findings and CBI filing FIR, on suo moto basis, against the Company and its Directors, alleging diversion of funds from banking system, a fraud of Rs. 3805.15 core is being reported by Bank to RBI. In the accounts of the company (BPSL), Bank has already made provisions amounting to Rs.1932.47 crore, as per prescribed prudential norms."

"It has been observed that the company has misappropriated bank funds, manipulated books of accounts to raise funds from consortium lender banks. At present, the case is at NCLT which is in advance stage and the Bank expects good recovery in the account," it added.

 

Bhushan Power has been one of the 12 accounts identified by the RBI for insolvency proceedings.

Read more about: pnb punjab national bank fraud
Story first published: Monday, July 8, 2019, 10:35 [IST]
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