Syndicate Bank Bribery Case: Bhushan Steel Shares Dip 20% at 52-week Low

Stocks of Bhushan Steel recorded a year's low at ₹305 per share following involvement in Syndicate bank corruption case.

The price of each share slumped ₹76.20 or 20 percent during trading hours on Wednesday at 1.30 pm.

On Saturday, CBI arrested the chairman of Syndicate bank, S K Jain and a few others for demanding bribe to enhance the credit limit of Bhushan Steel and Prakash Industries.

According to reports, Jain was found demanding a bribe of ₹50 Lakh from Neeraj Singhal, Bhushan Steel's vice-chairman. CBI director, Ranjit Sinha ordered an internal inquiry after his team failed to arrest Singhal during the investigation at his residence in the bribery case.

After conducting raids at 20 different locations across Bangalore, Delhi, Mumbai and Bhopal, CBI seized ₹21 lakh cash, fixed deposit receipts of ₹63 lakh and gold jewellery worth ₹1.68 crore.

Bhushan Steel had taken a loan of ₹100 crore and Prakash Industries also borrowed ₹120 crore from Syndicate Bank. Both the companies allegedly tried to settle the loan by bribing Jain last week.

CBI has also seized ₹50 lakh offered to Jain by both the companies. Moreover, both companies are also being investigated in connection with the coal block allocation scam, popularly known as Coalgate.

Incorporated in 1989, Bhushan Steel' reported net loss of ₹19.57 crore in Q4 March 2014 against its net profit of ₹280 crore in Q4 March 2013. Net sales plunged 10.9 percent to ₹2,399.73 crore in Q4 March 2014 over Q4 March 2013.

During the year 2013-14, the company took loan of ₹1,042 crore from Axis Bank.

Bhushan Steel facility is located in Sahibabad (Uttar Pradesh), Khopoli (Maharashtra) and Meramandali in Orissa state. The company is listed in BSE with stock code 500055 and in NSE with name BHUSANSTL.