BPSL is facing an investigation from different government agencies. Based on an FIR by the CBI and a forensic audit report, several banks had reported fraud. The combined amount reported as fraud by just Punjab National Bank (PNB) and Allahabad Bank was more than Rs 5,500 crore.
JSW Steel had, during a hearing in July, also expressed apprehension about the reports of fraud that had emerged at BSPL. The firm had, however, said it was not backing out of the bidding process. It had then sought forensic audit reports of banks, which had detected frauds at BSPL. In July, PNB and Allahabad Bank had reported that they had detected frauds of Rs 3,800 crore and Rs 1,774 crore, respectively, in debt-laden BSPL’s accounts. In its report to the RBI on July 7, PNB has detected a fraud of more than Rs 3,800 crore by BSPL, which had been done by the company by misappropriating bank funds. In its report to the RBI, PNB also alleged BSPL had manipulated its books of accounts to raise funds from consortium lender banks. A week later, on July 13, Allahabad Bank, too, said it had detected a fraud of Rs 1,774 crore by BSPL following the same modus operandi of misappropriating funds and manipulating books of accounts to raise funds from consortium lender banks.