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ED Arguments at NCLAT in BPSL Assets Attachment Case

Steel News - Published on Fri, 24 Jan 2020

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The Enforcement Directorate has told the National Company Law Appellate Tribunal that JSW Steel cannot seek to ring-fence Bhushan Power and Steel and its assets from attachment by it on charges of money laundering by its former promoters, as Section 32A of the Insolvency and Bankruptcy Code does not apply retrospectively. ED said “Therefore, the amendment in the form of Section 32A having come into force after the resolution plan was approved in this case, and the fact that Section 32A had not been given retrospective effect, would mean that the benefit of Section 32A cannot be claimed by the successful resolution applicant in this case. Even assuming without admitting that Section 32A were to apply to the present case, it is submitted that the successful resolution applicant is a related party as per Section 5 (24) of the IBC, which includes associate company of the corporate debtor.”

The investigation agency informed the NCLAT that during the course of investigation under the Prevention of Money Laundering Act, it found that BPSL and JSW Steel were associated as shareholders, holding 24.09% and 49% equity, respectively, in a joint venture, Rohne Coal Company.

JSW Steel’s resolution plan was approved by the National Company Law Tribunal on September 5, 2019; while Section 32A was notified on December 28, 2019.

ED, had in October attached BPSL assets worth over INR 4,000 crore in connection with a money-laundering probe

The NCLAT on Thursday, by way of a last chance, directed the ministry to make its submission before the next hearing scheduled for January 31.

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Posted By : Rabi Wangkhem on Fri, 24 Jan 2020
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