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Naveen Jindal’s Jindal Steel and Power Ltd seems to be facing trouble from Arun Kumar Jagatramka, the erstwhile promoter of under-liquidation Gujarat NRE Coke.
In a letter to SEBI, Jagatramka has accused Jindal and his company of not reporting hurdles that JSPL is facing in the Russelvale and Wongawilli mines in New South Wales, Australia. JSPL operates these mines through Wollongong Coal and Wongawilli, its main subsidiaries with operations in Australia.
In the letter to SEBI, Jagatramka said: “Officers of JSPL India have repeatedly and regularly assured investors that the mines in Australia are operating well and production is expected to ramp up in the future. But, in reality, the bigger mine with newly installed Longwall mining equipment, namely, Russell Vale Mine, is on care and maintenance since 2014 due to the absence of mining approvals.
“Prohibition notices were issued to the mine in February and March 2019 due to serious breaches of workplace safety laws. Finally, on March 19, 2019, the NSW Resource Regulator shut down the mine due to continued non-compliance and roof fall. Surprisingly, none of this has been reported by JSPL India to its shareholders and bankers who have material interest and a right to be aware of these facts.
“Naveen Jindal and officers of JSPL India, by hiding these key facts about the current situation of the mines in Australia and their impact on JSPL India, from the bankers and the Indian shareholders, are knowingly breaching the rules of SEBI disclosures in India.”
Bitter battle
However, analysts say Jagatramka and Jindal have been embroiled in a bitter battle over recovery of dues from the former’s companies to JSPL. The mines operated by JSPL in Australia had earlier been taken away from Jagatramka in a bid to recover dues.
In response to queries from BusinessLine , a JSPL spokesperson said: “The allegations made by Arun Jagatramka in his letter are false, frivolous and imaginary. JSPL observes best corporate governance practices and has always disclosed to its stakeholders all the information required as per the regulations.
“Arun Jagatramka, in an attempt to make a backdoor entry (after being barred) under the Insolvency and Bankruptcy Code, mischievously floated a scheme of arrangement under the Companies Act, causing a loss of approximately ₹5,000 crore to banks and other creditors. The same has been challenged by JSPL and the NCLAT has provided a stay on further proceedings. The matter is sub judice.”
(With inputs from Richa Mishra in New Delhi)
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