hile the deadline of October 5 for implementing the plan still stands, the appellate tribunal said it may dispose of JSW Steel’s appeal in the next hearing slated on October 14, 2019.
The National Company Law Appellate Tribunal (NCLAT) on Monday declined to pass any order on JSW Steel’s application to stay the implementation of the Rs 19,700-crore resolution plan for Bhushan Power and Steel’s (BPSL). The tribunal was heeding an appeal by lenders to BPSL. While the deadline of October 5 for implementing the plan still stands, the appellate tribunal said it may dispose of JSW Steel’s appeal in the next hearing slated on October 14, 2019.
JSW Steel had filed an application with the NCLAT on September 13, 2019, seeking protection of the insolvent firm’s assets post-take over. The company wants that the assets should not be attached by the investigating agencies. It also wanted that the profits earned by BPSL, during the Corporate Insolvency Resolution Process (CIRP) starting with July 26, 2017, should not be distributed to the lenders. On September 5, the National Company Law Tribunal (NCLT) had approved the resolution plan for BPSL.
The NCLT, however, did not grant BPSL protection from penal financial liability and attachment of assets on account of acts of omission or commission of the previous directors under the Prevention of Money Laundering Act (PMLA), 2002. The CBI had on April 5, 2019, registered an FIR against the erstwhile directors and the debt-ridden firm for alleged siphoning of thousands of crores of funds borrowed from banks on behalf of BPSL.
Senior advocate Ramji Srinivasan, appearing for the committee of creditors (CoC) and lead bank State Bank of India (SBI), said JSW Steel had undertaken to pay the amount within 30 days of the approval of the resolution plan. The pendency of any PMLA investigation is no ground to permit JSW Steel to not adhere to the terms of the approved resolution plan, he argued.
“JSW Steel had sought exemption on the ground of any proceedings, whether present or in future, including under PMLA, but nevertheless, had undertaken that even if the exemption is not granted by NCLT, they will comply with the resolution plan,” Srinivasan said. BPSL’s insolvency issue has been pending for over 800 days and everyday, lenders are losing around Rs 11.5 crore on interest.
Kapil Sibal, senior counsel appearing for JSW Steel, however, requested the NCLAT bench to give JSW Steel time till the matter is “sorted out” for making payments.
The NCLAT declined to pass an order but allowed JSW Steel to implead Union of India through the secretary of the corporate affairs ministry and director of the Enforcement Directorate. Union of India may address the matter on behalf of the CBI and SFIO, it said.