The Delhi High Court has allowed Jindal Steel and Power Limited (JSPL) to transfer monies to its foreign subsidiaries. This is a relief for the company that wanted to transfer $-300 million to its wholly-owned foreign subsidiary Jindal Steel and Power (Mauritius) Limited to meet debt obligations.

The court set aside an order by the Reserve Bank of India and held that permission to remit money abroad cannot be withdrawn on the basis of apprehensions that illegal transactions will be carried out or that the money will be siphoned off to impede pending cases in India. The court also ordered that the embargo on JSPL, which mandated keeping unencumbered assets in India worth the amount remitted to foreign subsidiaries, is being vacated.

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This embargo was in place on the request of the Enforcement Directorate that suspected that transferring these assets would jeopardise the on-going investigations against JSPL.

The court order said that a year has now passed since the said communication dated December 3, 2019 was issued by the ED.

“No demand appears to have been raised on the petitioner by the ED in the past one year. Even otherwise, in my opinion, the Directorate of Enforcement has enough powers under various statutory regimes to attach properties and assets of a defaulting individual or take other steps. As the impugned order has been set aside, the bond in question shall come to an end and the embargo on the assets shall cease,” the Delhi HC order said.

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