Serious Fraud Investigation Office Vs Nittin Johari & Anr. (Supreme Court of India)
The Supreme Court considered an appeal filed by the Serious Fraud Investigation Office (SFIO) challenging the order of the Delhi High Court granting bail to the respondent, who had served as Chief Financial Officer and Whole-Time Director (Finance) of Bhushan Steel Ltd. The prosecution alleged that between financial years 2009–10 and 2016–17, the promoters of Bhushan Steel Ltd., assisted by employees and associates, created a complex network of 157 companies to siphon funds from the company. According to the allegations, the scheme involved fraudulently obtaining credit from lender banks, manipulating books of accounts and financial statements, and causing wrongful loss to banks and financial institutions amounting to ₹20,879 crores, while generating wrongful gain of approximately ₹3,500 crores for the promoters and their family members.
The respondent was alleged to have played a central role in these activities. The complaint stated that he actively participated in the use of fraudulent letters of credit to obtain credit from banks, inflated stock-in-transit figures to increase drawing power, and manipulated financial statements under the guise of adopting Indian Accounting Standards. The investigation was initiated by the SFIO under orders issued by the Ministry of Corporate Affairs under Section 212(1)(c) of the Companies Act, 2013. Over time, the investigation expanded to cover 157 companies and 130 individuals.
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