With JSW Steel’s Rs 19,700 crore bid for Bhushan Power and Steel (BPSL) hanging in the balance, the Enforcement Directorate (ED) is understood to have moved the Supreme Court against the takeover. The ED is opposing a plea by the Committee of Creditors (COC) that is actively seeking implementation of JSW Steel’s resolution plan.

The Supreme Court is hearing a plea by the BPSL’s Former Promoter Sanjay Singal against the NCLAT Nod to the implementation of the approved JSW Steel resolution plan.

JSW’s bid of Rs 19, 700 crore was selected as the winning bid in the IBC process. However, ED’s investigations and attachment of assets into charges of money laundering against the Former Promoters of BPSL have thrown a

spanner in the works, with the issue now pending before the Supreme Court.

The ED, so far, has attached assets worth Rs 4,000 crore. JSW Steel has been battling against pumping in Rs 19, 700 crore into BPSL, as per the resolution plan, with the assets still under attachment.

The ED has argued that the deal cannot proceed, alleging the founder promoters of the JSW Steel and BPSL are “related entities”. The ED has alleged that the founder promoters of both Cos were engaged in a JV over a coal block.

Further, the ED affidavit argued that the newly introduced Section 32A to the IBC is not applicable to the case. Section 32A, introduced after an amendment to the IBC, protects the corporate debtor from any prosecution or attachment of assets if a resolution plan is approved. The ED affidavit submitted that the attachment was done prior to the introduction of the amendment.

Challenging the NCLAT nod to JSW Steels resolution plan, the ED has urged that the Tribunal lacked jurisdiction to unfreeze assets attached under PMLA, and to allow the sale of the seized assets.

ED has also argued against the Ministry of Corporate Affairs, which had submitted that the deal should be allowed to go through.

The Supreme Court is likely to hear the case on July 6.

First Published:Jul 1, 2020 6:10 PM IST