Bhushan Power Insolvency Case: NCLAT To Hear JSW Steel’s Plea On Oct 14
JSW Steel, which has emerged as the highest bidder for Bhushan Power & Steel Ltd., is seeking immunity from the ongoing cases of money laundering against the bankrupt firm. The NCLAT has also directed impleading the Ministry of Corporate Affairs, the Central Bureau of Investigation and Enforcement Directorate as party in the matter.
A three-member NCLAT bench, headed by Chairman Justice SJ Mukhopadhaya, said it will also decide on the payment of Rs 19,350 crore by JSW Steel to the Committee of Creditors of Bhushan Power on Oct. 14. However, the bench declined to stay the order of depositing the amount within a month, which is Oct. 5.
"We allow the appellant to implead Union of India through Ministry of Corporate Affairs and Enforcement Directorate as respondent No. 3 & 4. The Union of India may address the matter on behalf of CBI and SFIO," said NCLAT. "Let notice be issued.”
During the proceedings, the CoC requested NCLAT to direct for payment of the money. However, the bench said it would look into this issue on Oct. 14 only.
On Sept. 5, National Company Law Tribunal’s Delhi bench approved JSW Steel’s $2.7 billion bid for Bhushan Power, the second major steel asset the mill has bagged under the nation’s new insolvency process.
According to the resolution plan approved by NCLT, Rs 19,350 crore will be distributed among financial creditors to settle their Rs 47,158 crore of dues. The remaining Rs 350 crore would be paid to operational creditors to settle Rs 733.76 crore claims. JSW Steel will make an infusion of Rs 7,200 crore in Bhushan Power for improving its operations.
NCLT also said criminal proceedings against the Bhushan Power’s founders on alleged siphoning off of funds would not impact an acquisition by JSW Steel. "The criminal proceedings initiated against the erstwhile members of the board of directors and others shall not affect the JSW-H1 (highest) Resolution Plan Applicant or the implementation of the resolution plan.”
It, however, did not grant JSW Steel certain relief sought from statutory authorities under the Income Tax Act, 1961, and the Reserve Bank of India.
"We leave it open to the members of the CoC to file appropriate applications if criminal proceedings result in the recovery of money which has been siphoned off or on account of tainted transactions or fabrication," NCLT said.
The Bhushan Power insolvency case was filed by lead lender Punjab National Bank after the company failed to pay loans within a stipulated time frame.