JSW Steel is confident that it will get a favourable ruling in the petition seeking immunity from the ongoing criminal cases against promoters of Bhushan Power and Steel (BPSL) before taking over the stressed asset.

Hearing a petition filed by JSW Steel, NCLAT recently directed the Enforcement Directorate to lift the attachment of Bhushan Power and Steel asset as it is undergoing insolvency process. JSW Steel had emerged the highest bidder for the asset.

NCLAT also directed both ED and CBI to file its response before the next hearing on October 25.

In its response petition, the Enforcement Directorate has said NCLAT is not the competent authority to order the lifting of the attachment made under the Prevention of Money Laundering Act.

The provisional order of ED dated September 10 passed under Section 5 of PMLA is not amenable to NCLAT, and its validity can be examined only by the Adjudicating Authority under Section 8 of the PMLA, said the investigating agency in its response to NCLAT.

Read also - ED move to attach Bhushan Power asset vindicates our stand: JSW Steel

The ED has also submitted that the PMLA is specific to money laundering and no exception can be given to assets under insolvency unless provided for by the Parliament. It also said IBC had not been given any powers to NCLAT for dealing with PMLA cases.

Earlier, ED had sought legal opinion on moving the Supreme Court against the NCLAT order in the case.

Read more: The IBC process should not be derailed by past promoters’ sins

In the meanwhile, Seshagiri Rao, Joint Managing Director, JSW Steel said the company is optimistic that the ruling in the case will be in its favour and it will be the test for the entire IBC as no promoter would want to take over a sick company and turn it around without knowing whether he would retain it or not in future.

Further read: IBC - In spite of NCLT approval litigations are cropping up, says JSW Steel chief

Asked whether the company has a plan 'B' on the acquisition that has been dragging on for over two years now, Rao said there is no question of considering any other plan in this case as the outcome of this process is very clear, but it is just taking more time than expected.

If the verdict goes the other way round, Rao said it would also have an impact on other cases where the insolvent company has already been taken over by the new promoter.

Related Topics