JSW Tells NCLT That It Serious About Bhushan Power, While NCLT Says Fraud Reports Won’t Affect Insolvency Process

JSW Steel’s lawyers told the National Company Law Tribunal (NCLT) that it is not backing out from the resolution process of Bhushan Power & Steel Ltd (BPSL) despite reports of alleged fraud by its former promoters.

In response, a two member NCLT bench asked BPSL’s resolution professional (RP) to hand over a copy of the forensic report to JSW Steel, adding that alleged fraud reports would not impact the insolvency resolution process or JSW's resolution plan for BPSL.

It may be recalled that on February 4, the National Company Law Appellate Tribunal (NCLAT) had dismissed the plea of Tata Steel and upheld the Committee of Creditors (CoC) decision to approve JSW Steel's bid.

The NCLAT had said the CoC decision was well within its rights to negotiate better terms with resolution applicants. It had also asked NCLT to decide over JSW Steel's bid by March 31, 2019.

However, the judgement is still pending before the NCLT’s principal bench.

JSW Steel had revised its offer from Rs 11,000 crore to Rs 18,000 crore and later to over Rs 19,000 crore, whereas Tata Steel's last offer was at Rs 17,000 crore after it had refused to revise its bid.

Allahabad Bank had also reported a fraud of more than Rs 1,774 crore by BPSL to the Reserve Bank of India.

Earlier, PNB reported a fraud worth Rs 3,805.15 crore by BPSL by misappropriating bank funds and manipulating its books of accounts and it was revealed that around 85% of PNB's Rs 4,399 crore exposure to the company had been siphoned off.

According to the Central Bureau of Investigation, BPSL’s former promoters had allegedly siphoned off around Rs 2,348 crore through its directors and staff from the loan accounts of PNB, Oriental Bank of Commerce, IDBI Bank and UCO Bank into the accounts of more than 200 shell companies.