ED move to attach Bhushan Power asset vindicates our stand: JSW Steel

Suresh P Iyengar Mumbai | Updated on October 13, 2019 Published on October 13, 2019

JSW Steel had moved NCLAT seeking immunity from criminal proceedings against Bhushan Power and Steel’s promoters   -  REUTERS

The BPSL insolvency case has been going on for two years

The Enforcement Directorate has attached assets worth ₹4,025 crore of Bhushan Power and Steel (BPSL) under the Prevention of Money Laundering Act.

As a successful bidder for the stressed BPSL, JSW Steel had sought immunity and ring-fencing of the asset from the ongoing criminal investigations against the promoters.

Incidentally, the case filed by JSW Steel will come up for hearing on Monday. The outcome of the case will pave the way for other fraudulent promoters’ assets being sold off under the Insolvency and Bankruptcy Code.

Reacting to the development, Seshagiri Rao, Joint Managing Director, JSW Steel & Group CFO, said it vindicates the JSW Steel stand of seeking immunity from attachment of properties of a corporate debtor.

Earlier, Punjab National Bank and Allahabad Bank had revealed that the former promoters and directors of BPSL had defrauded the banks by juggling accounts to get loans of over ₹5,500 crore.

The properties to be attached by the ED include land, buildings and machinery of BPSL’s plant in Sambalpur district of Odisha.

Passing the order of attachment, the additional director in PMLA office said that if the property is not attached, the same could change hands creating a bona fide third-party interest in other proceedings, creating difficulties in retrieving the same in future.

The property has been attached for 180 days and until further order of the PMLA office, it cannot be disposed off, transferred or dealt with in any manner.

The development will further delay JSW Steel’s attempt to take over the stressed asset. The BPSL insolvency case has been going on for two years, shattering the government’s hopes for a time-bound resolution of stressed assets under the IBC.

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Published on October 13, 2019
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