Economic Times reported that JSW Steel chairman Mr Sajjan Jindal said his company will approach a higher court to seek immunity against claims arising from alleged money laundering frauds at Bhushan Power and Steel. He told ET “We want a neat and clean company, and we don’t want any confusion. We as a resolution applicant had offered this value under certain conditions. The NCLT order has modified the plan in ways that can have an impact on the viability of the plan. We will go for judicial intervention to make sure our conditions are approved.”
Mr Jindal said the company will either seek clarifications from the NCLT or challenge the order in the appellate tribunal and that the company will file an appeal before the end of next week.
There are two clauses in the NCLT September 5 order that have not gone down well with the steelmaker.
First, the court has refused to grant JSW Steel immunity from claims arising from money laundering frauds reported by Punjab National Bank and Allahabad Bank in the last few months. A total of more than Rs 5,580 crore worth of loans taken by the company have been declared fraudulent by the two banks collectively. The Delhi High Court’s April ruling held the money-laundering law above the bankruptcy law. So, JSW Steel is worried that the assets of the acquired company may get attached as proceeds of crime, which will affect its health after JSW Steel has taken it over.
Second, profits generated by the company during the insolvency process that could have been used as working capital by JSW Steel have been ordered to be distributed among the financial creditors on a pro rata basis.
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