An Indian court has granted Tata Steel an exemption from appearing before a court in a case against the former promoters of Bhushan Steel, which was acquired last year by a Tata group firm.

The former Bhushan executives are accused of fraudulently obtaining letters of credit (L/Cs) on the basis of false documents.


The case brought by India's Serious Fraud Investigation Office alleges that Bushan's former promoters manipulated stocks in the company's accounts to show inflated figures on the basis of false valuation reports.

It also alleged that the former promoters opened fake L/Cs and created fake vouchers to siphon off funds from the company.

Banks implicated

The role of officers at three state controlled banks - State Bank of India, Punjab National Bank and Uco Bank - are also under scrutiny for their involvement in the provision of L/Cs that were used to cover up that Bhushan was accumulating non-performing loans.

Banks caught up in the fraud have reportedly lost the equivalent of around US$450 million.

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