Bhushan Power and Steel insolvency: NCLAT to hear JSW Steel's plea on 14 October

New Delhi: The National Company Law Appellate Tribunal will hear the plea of JSW Steel, which has emerged as the highest bidder for Bhushan Power & Steel Ltd, seeking immunity from the ongoing cases of money laundering against the latter on 14 October. It also directed impleading the Ministry of Corporate Affairs, the CBI and the Enforcement Directorate as a party in the matter. A three-member NCLAT bench headed by Chairman Justice S J Mukhopadhaya has also said it will decide over the payment of Rs 19,350 crore by JSW Steel to the Committee of Creditors (CoC) of Bhushan Power & Steel (BPSL) on the next date of hearing on 14 October. However, the bench declined to stay the order of depositing the amount within a month, which is 5 October. [caption id=“attachment_4407133” align=“alignleft” width=“380”] Representational image. Reuters.[/caption] “We allow the appellant to implead Union of India through the Ministry of Corporate Affairs and Enforcement Directorate as respondent No 3 & 4. The UoI may address the matter on behalf of CBI and SFIO,” said NCLAT. “Let notice be issued,” it added. During the proceedings, the CoC requested the appellate tribunal to direct for payment of the money. However, the bench said it would look into this issue on 14 October only. Last week, Delhi-based principal bench of the National Company Law Tribunal (NCLT) approved Rs 19,700 crore bid of JSW Steel for debt-ridden BPSL. Although, in its 138-page order, the NCLT allowed protection to JSW Steel from criminal cases filed against the promoters, it was silent over the money laundering cases. Under the insolvency proceedings, JSW Steel has emerged as the winning bidder for BPSL. According to the resolution plan approved by the NCLT, Rs 19,350 crore will be distributed among financial creditors to settle their Rs 47,158 crore of admitted claims. The remaining Rs 350 crore would be paid to operational creditors to settle less than half of their Rs 733.76 crore admitted claims. Banks will get 41.03 percent of their outstanding dues as compared to a liquidation value of between Rs 9,320-9,707 crore, it said. JSW Steel will make an infusion of Rs 7,200 crore in BPSL for improving its operations. BPSL was dragged to insolvency proceedings by lenders led by PNB after the company failed to pay loans within a stipulated time-frame. The NCLT said criminal proceedings against the former founders of BPSL on alleged siphoning off of funds would not impact takeover by JSW. “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 had said. It, however, did not grant JSW certain relief sought from statutory authorities under the Income Tax Act, and the RBI. “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,” the NCLT said on charges against former promoters.