The National Company Law Appellate Tribunal (NCLAT) on Monday allowed JSW Steel to acquire Bhushan Power & Steel Ltd (BPSL) for Rs 19,700 crore by providing it immunity from prosecution. The tribunal also directed investigative agencies to not seize the assets of BPSL. The tribunal had last month reserved its judgement on JSW Steel's purchase of the insolvent BPSL. The Sajjan Jindal-promoted JSW Steel had offered over Rs 19,700 crore to acquire Bhushan Power under the insolvency process.

JSW Steel had moved the NCLAT seeking legal immunity as a condition to takeover Bhushan Power & Steel under the Insolvency and Bankruptcy Code (IBC).

On January 13, the NCLAT had asked investigative agencies such as the ED, the Serious Fraud Investigation Office and the Central Bureau of Investigation (CBI) to file an affidavit clarifying whether prosecution against BPSL can be dropped once JSW Steel, the successful bidder, takes over the company.

The Enforcement Directorate (ED) is investigating alleged fraud committed by the debt-laden firm's previous management and had attached assets worth over Rs 4,025 crore.

JSW Steel has been granted immunity under Section 32A of the IBC. The government in December 2019 amended the IBC and inserted Section 32A, which mandates that once management or control of a debt-ridden company changes after the completion of the corporate insolvency resolution process (CIRP), it would not be liable for any offences committed prior to the commencement of the insolvency resolution process.

Bhushan Power was one of the first 12 defaulters identified by the Reserve Bank of India (RBI) and sent to National Company Law Tribunal (NCLT) in 2016.

First Published:Feb 17, 2020 11:35 AM IST