Fraud Probe Won’t Derail JSW’s $2.9 Billion Bid for Bhushan
While JSW is “so far” not backing out of its offer to buy BPSL, it is anxious about alleged frauds, impact on the sale process
(Bloomberg) -- JSW Steel Ltd., India’s most valuable steel producer, said it is likely to go ahead with a 197 billion rupees ($2.9 billion) offer to buy out a stressed steel mill even as a string of accounting frauds were uncovered at the target company.
While JSW is “so far” not backing out of its offer to buy Bhushan Power & Steel Ltd., the company is anxious about the alleged frauds and its impact on the sale process, it’s lawyer Arun Kathpalia said Monday during a hearing at the National Company Law Tribunal.
Earlier this month Allahabad Bank Ltd. and Punjab National Bank reported financial frauds amounting to about 18 billion rupees and 38 billion rupees respectively at Bhushan.
Shares of JSW jumped as much as 1.8% after erasing losses of 1.6% after its lawyer made the comments in court.
A two-judge bench headed by Justice M.M. Kumar said during the hearing that the alleged fraud reports would not affect the insolvency resolution process and JSW’s plan for Bhushan Power. The NCLT, which is yet to approve the sale of the mill to JSW, on Monday allowed the bankruptcy administrator to give copies of forensic audits of Bhushan to JSW.
--With assistance from Swansy Afonso.
To contact the reporter on this story: Upmanyu Trivedi in New Delhi at utrivedi2@bloomberg.net
To contact the editors responsible for this story: Phoebe Sedgman at psedgman2@bloomberg.net, Anto Antony, Arijit Ghosh
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