Indian quasi-judicial body NCLAT has sought clarity from the Enforcement Directorate (ED) and corporate affairs ministery on immunity for JSW steel, as it acquires Bhushan Power and Steel.
National Company Law Appellate Tribunal (NCLAT) questioned the government and its agency, if JSW Steel has immunity from Bhushan Steel’s previous criminal liabilities. The tribunal directed the government and the ED to enclose evidence to justify denial of immunity to JSW Steel under insolvency laws.
In May 2019, ED filed a case of money laundering against promoters and former directors of Bhushan Power. The Central Bureau of Investigation also filed a first information report against the company. In wake of these allegations, JSW Steel sought immunity from Bhushan Steel’s criminal liabilities, which was refused by the NCLAT, though it accepted JSW’s resolution plan.
Financial creditors will be able to recover Rs19,350 crore and operational creditors will get Rs350 crore according to the resolution plan.
JSW Steel emerged as the successful bidder for debt-laden Bhushan Power and Steel after ED attached Bhushan Steel’s assets worth Rs4,025cr in October 2018.
The appellate tribunal has directed the parties concerned to file their responses by Jan 20 for the hearing on Jan 23.