CBI to probe BSP scrap theft racket in Chhattisgarh

The Chhattisgarh government has formally handed over to the Central Bureau of Investigation (CBI) the probe into the alleged theft of iron scrap from Bhilai Steel Plant (BSP), widening the investigation into the alleged involvement of plant employees, transporters, scrap dealers and private steel companies.

The state government, through a notification issued on September 25, 2026, gave consent under Section 6 of the Delhi Special Police Establishment Act, 1946, for CBI to exercise its powers and jurisdiction across Chhattisgarh to investigate Crime No. 277/2026 registered at Purani Bhilai police station in Durg.

The case involves offences registered under Sections 303(2), 317(4), 319(2), 336(3), 338, 340(2), 111, 112, 61(2)(a) and 3(5) of the Bharatiya Nyaya Sanhita.

The case surfaced on May 26, when police received information about iron scrap allegedly being transported along with flue dust from the steel plant. Police subsequently seized vehicles and machinery and recovered a large quantity of iron material.

Investigators later raided the premises of AK Traders at Hathkhoj in Bhilai, where they allegedly recovered around 250 tonnes of iron plates, beams, cuttings and other scrap. The seized material was valued at around ₹90 lakh, while the combined value of the recovered material, vehicles and machinery was estimated at around ₹3.22 crore.

Scrap allegedly moved with flue dust

The investigation found that vehicles authorised to transport flue dust from BSP were allegedly being used to move iron scrap out of the plant.

An agreement had been executed between the Blast Furnace-2 department of BSP and RDK Industries for transportation of flue dust, while Himanshu Brothers had a work order connected with transportation of the material.

According to the investigation, scrap was allegedly loaded at the SMS-III yard and concealed with or beneath flue dust before the vehicles left the plant. The material was allegedly transported to the A.K.

Traders premises, where it was unloaded and stored. The police probe also examined the alleged role of transporters, drivers and people associated with the scrap yard.

VTS allegedly manipulated

A key part of the investigation was the alleged manipulation of the Vehicle Tracking System (VTS).

Vehicles entering the plant for transportation of flue dust were fitted with tracking devices. Investigators alleged that in some cases the devices were removed after vehicles completed loading and weighbridge formalities, allowing the vehicles to move without their subsequent GPS movements being recorded.

Police also examined allegations that vehicle registration numbers were changed or used on other vehicles to facilitate movement of the scrap and avoid detection.

BSP officials among those arrested

The investigation subsequently led to the arrest of BSP employees.

On July 10, police arrested Himanshu Bhushan Malik, general manager at SMS-3, and Manoj Kumar Devangan, an engineering associate at SMS-3, taking the number of arrests at that stage to 15.

Police had alleged that the racket had been operating for several months and involved the removal of iron scrap from BSP using vehicles carrying flue dust.

The investigation also examined alleged financial transactions between people associated with the case.

Probe reaches private steel company

The investigation later expanded to companies allegedly receiving or using the stolen material.

Police arrested Vinod Kumar Garg, managing director of Raipur Power and Steel Ltd, Rasmada, and director Sandeep Kumar Singh in September. Their arrest took the total number of accused arrested in the case to 21.

Investigators alleged that scrap stolen from BSP was being supplied to private industrial units, where it was subsequently used as raw material.

Financial and electronic trail

Investigators examined the bank accounts of people allegedly linked to the operation and looked into cash deposits and other financial transactions during the relevant period.

The police also collected and analysed Call Detail Records (CDRs), Internet Protocol Detail Records (IPDRs), subscriber details and other electronic evidence.

The records were used to examine communications between transporters, drivers, plant employees and others allegedly connected with the movement and disposal of the scrap.

The investigation also included witness statements, vehicle-registration records, forensic examination of recovered material and seizure of vehicles and machinery.

With the state government’s September 25 notification, the CBI will now take up the investigation and examine the alleged scrap theft, the financial and electronic trail and the role of the various persons and companies allegedly connected with the case.