NCLAT Asks ED To Release Assets Of Bhushan Power And Steel Limited As It Stays Rs 19,700-Crore Sale To JSW Steel
By : Legal Era
Update: 2019-10-14 12:28 GMT
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[ By Bobby Anthony ]The Rs 19,700-crore payout by JSW Steel to acquire debt-ridden firm Bhushan Power & Steel Limited (BSPL) has been put on hold by The National Company Law Appellate Tribunal (NCLAT) until further orders.It has also directed the Enforcement Directorate (ED) to release BSPL’s attached properties and directed it not to attach any further assets without its permission.An...
The Rs 19,700-crore payout by JSW Steel to acquire debt-ridden firm Bhushan Power & Steel Limited (BSPL) has been put on hold by The National Company Law Appellate Tribunal (NCLAT) until further orders.
It has also directed the Enforcement Directorate (ED) to release BSPL’s attached properties and directed it not to attach any further assets without its permission.
An NCLAT bench has also directed the ED and the Central Bureau of Investigation (CBI) to file a reply shortly.
Earlier, the ED stated that it had attached BSPL’s assets worth more than Rs 4,025 crore as part of its money laundering investigation which is linked to an alleged bank loan fraud.
BSPL’s land, building, plant and machinery located in Odisha had been attached by the ED under the Prevention of Money Laundering Act (PMLA) provisions.
The appellate tribunal has directed to list the matter on October 25 for further hearing.
The ED's provisional attachment order dated October 10 has been stayed until the issue is decided by the appellate tribunal, it said.
During the proceedings, the Ministry of Corporate Affairs (MCA) told the NCLAT that the ED has no jurisdiction to attach assets under the insolvency process. The MCA's stand is in consultation with the Department of Financial Services and banks.
The NCLAT was hearing petitions filed by JSW Steel, former promoters of BPSL, among others, challenging the order of the principal bench of the National Company Law Tribunal (NCLT).
It may be recalled that on September 5, the NCLT had approved the JSW Steel's Rs 19,700 crore resolution plan for BPSL.
However, JSW Steel approached the NCLAT seeking protection from the ongoing investigation in money laundering cases against former promoters of BPSL.
JSW Steel had also challenged the NCLT's direction to redistribute profits earned by BPSL during the Corporate Insolvency Resolution Process (CIRP) among the financial creditors and operational creditors of the debt-ridden firm.