NCLAT asks ED to release Bhushan Power's attached property

The National Company Law Appellate Tribunal (NCLAT) on Monday put JSW Steels Rs 19,700 crore payment to acquire Bhushan Power and Steel (BPSL) on hold and asked the Enforcement Directorate (ED) to release the BPSL's attached properties.

BCCL
The NCLAT will next hear the matter on October 25.
The National Company Law Appellate Tribunal (NCLAT) on Monday put JSW Steels Rs 19,700 crore payment to acquire Bhushan Power and Steel (BPSL) on hold and asked the Enforcement Directorate (ED) to release the BPSL's attached properties.

The appellate tribunal also asked the ED not to attach any more property of BPSL without its permission.

The Enforcement Directorate (ED) on Saturday said that it has attached immovable properties worth Rs 4,025.23 crore of BPSL in a money laundering case against the firm for siphoning-off funds obtained as loans from various banks and financial institutions. Following the attachment, JSW Steel, in a statement, said that the action vindicates the company's stand on immunity.


"It vindicates JSW Steel's stand of seeking immunity from attachment of properties of corporate debtor. This may happen even in cases where the control is changed under IBC," JSW Steel's Joint MD and Group CFO Seshagiri Rao said in a statment.

The company last month moved the appellate tribunal seeking immunity from criminal proceedings in the ongoing bank fraud investigation after the National Company Law Tribunal (NCLT) had approved its Rs 19,700 crore bid to acquire the bankrupt BPSL under the Insolvency and Bankruptcy Code (IBC).

While approving the bid, the tribunal had said that the sale and the resolution process would not be affected by the criminal proceedings against the founders of BPSL.
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The ED on Saturday said that investigations conducted under Prevention of Money Laundering Act (PMLA) revealed that BPSL had used various methods to siphon off funds obtained as loans from various banks and financial institutions and an amount of Rs 695.14 crore was introduced as capital by Sanjay Singal and his family members in BPSL out of artificially-generated Long Term Capital Gains (LTCG) by diversion of bank loans fund of BPSL. LTCG was exempted from Income Tax during the relevant time, the agency said.

The NCLAT will next hear the matter on October 25.

The tribunal observed that ED has no jurisdiction to attach property of a corporate debtor, when an appeal with regard to attachment is pending.
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