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Scam May Delay JSW Buy of Bhushan Power & Steel - Report

Steel News - Published on Wed, 10 Jul 2019

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Business Line reported that the recent INR 3,805-crore scam involving Bhushan Power and Steel unearthed by Punjab National Bank may complicate the acquisition of the company by JSW Steel, which had emerged the top bidder for the debt-laden company during the insolvency process. The key question is whether the new owner will be able to take control of the tainted assets.

While Insolvency and Bankruptcy Code says that criminal proceedings against the stressed asset should be dealt separately, the recent Delhi High Court ruling that the money laundering law Prevention of Money Laundering Act prevails over the Insolvency and Bankruptcy Code when it comes to attachment of properties obtained from proceeds of crime. The money recovered from ‘tainted asset’ should be credited to the government, it said.

Any money recovered from the tainted asset has to be credited to the government and JSW Steel, in this case, cannot have any claim over the subsidiaries. However, JSW Steel, which had placed a value to these subsidiaries when it placed the bid for the stressed asset, would turn out to be a loser.

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Posted By : Ratan Singh on Wed, 10 Jul 2019
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