The ongoing Syndicate Bank bribery scandal that resulted in the arrest of the bank’s chief, SK Jain, and Neeraj Singal, managing director of Bhushan Steel, has put the steel company and its high debt firmly in the spotlight, spooking both lenders and investors.
While the lenders — 51 of them — have formed a consortium to find ways and means to recover their money, investors are stampeding. Bhushan Steel’s stock price has plummeted 68.5% since the scam broke.
It is a classic dream script gone awry.
Like many successful entrepreneurs in India, the Bhushan Group rose from humble origins. Kishori Lal Singal and his son Brij Bhushan had a set-up in Ambala, near Chandigarh, to transport cement.
“Theirs was a humble family and the senior Bhushan, though a shrewd businessman, kept a low profile. They were down-to-earth, subtle people, not flashy at all,” said RS Malik, who was deputy commissioner in Ambala in 1978 and had dealings with the family.
The Singals subsequently built a facility in Chandigarh that made door hinges and track fasteners for railways. Brij Bhushan, quick to spot an opportunity, grasped the potential in the steel business, and began to diversify.
“Brij is a visionary,” said one of his former associates from Punjab.