NCLAT allows JSW Steel to acquire BPSL, grants immunity
In a major relief to JSW Steel, the National Company Law Appellate Tribunal on Monday permitted the steel major to acquire the bankrupt Bhushan Power and Steel Ltd and provided it immunity from prosecution by Enforcement Directorate (ED).
The verdict comes after the NCLAT earlier in the month reserved its judgement on the matter.
The two-member bench, headed by NCLAT Chairman Justice S.J. Mukhopadhaya, said that the acquirer, JSW Steel will be rendered immune from the acts done by the former promoters of BPSL. However, it added that the prosecution of the former promoters under the money laundering act would continue.
JSW Steel had moved the appellate tribunal seeking immunity against future litigation due to alleged fraud by former BPSL promoters.
The development comes around three months after the appellate tribunal ordered a freeze on payments by JSW Steel. In October last year, the bench had ordered a stay on JSW Steel's payment of Rs 19,700 crore to acquire BPSL and asked the ED to release BPSL's attached properties. The appellate tribunal had also asked the ED not to attach any more properties of BPSL without its permission.
The ED, which is investigating alleged fraud committed by the debt-laden firm's previous management, had attached the assets of BPSL which it believes to be from proceeds of crime.
In an affidavit filed before the NCLAT, the ED had opposed immunity to JSW Steel in the BPSL matter.