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ED Seeks Supreme Court Stay on NCLAT Order Approving JSW Steel Bid for BPSL

Steel News - Published on Tue, 22 Sep 2020

Image Source: JSW Steel BPSL
Financial Express reported that India’s Enforcement Directorate has moved the Supreme Court seeking a stay on the National Company Law Appellate Tribunal’s order that approved the JSW Steel’s bid for debt-ridden Bhushan Power and Steel under the new amendment under Section 32(A) to the IBC that provides immunity to the new owners from ongoing criminal proceedings against the erstwhile promoters of the company. Seeking a stay on the appellate tribunal’s decision, the ED, in its appeal, told the SC that BPSL and JSW Steel are associated as shareholders, holding 24.09% and 49% equity, respectively, in a joint venture called Rohne Coal Company, therefore, JSW is a related party of the corporate debtor, and the protection under Section 32A will not be available to it.

The ex-promoters of BPSL are under investigation for diverting INR 4,025-crore bank funds taken as loans. The ED in October last year had provisionally attached BPSL’s assets worth over INR 4,025 crore for diversion of funds by the erstwhile management prior to the commencement of CIRP. Though the attachment was lifted by NCLAT, the ED had then appealed against the order in the SC.

JSW had offered to pay INR 19,350 crore to the financial creditors as part of its resolution plan, a near 60% haircut for the lenders. Apart from this, JSW had offered to pay operational creditors a sum of INR 350 crore against their admitted claims of INR 733 crore. NCLAT had on February 17 upheld NCLT’s decision and ruled that JSW Steel cannot be held responsible for the alleged misdeeds of the past promoters at any stage.

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Posted By : Yogender Pancholi on Tue, 22 Sep 2020
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