JSW Steel on September 13th 2019 challenged an order of the National Company Law Tribunal that approved its INR 19,700 crore bid for Bhushan Power and Steel, but did not provide immunity from attaching the insolvent firm’s assets, post-take over, by investigating agencies for recovering INR 5,580 crore fund digression by erstwhile promoters. Mentioning JSW Steel’s plea under section 61 of the Insolvency and Bankruptcy Code that allows any person aggrieved with the NCLT order to appeal before the NCLAT, senior counsel Kapil Sibal said that “So far as I (JSW Steel) am concerned, my asset is not proceeds of crime. The assets I acquire can’t be taken away.”
In its application, JSW Steel urged, “No penal liability or attachment of assets of the corporate debtor should occur on account of proceedings by CBI or ED for actions taken by the corporate debtor under its previous management prior to take over by JSW Steel.”
The two-member NCLAT bench, headed by its chairperson justice S J Mukhopadhaya, has scheduled the matter for hearing on September 16.
Based on forensic audit investigation findings, Punjab National Bank and Allahabad Bank had in July this year reported INR 3,805 crore and INR 1,775 crore frauds respectively to the Reserve Bank and made a total of INR 2,800 crore provisions as per the prescribed prudential norms. Both the lenders found that BPSL has misappropriated bank funds, manipulated books of accounts to raise funds from consortium of lenders. CBI filed FIR, on suo muto basis, against BPSL and its directors.
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