BPSL case: NCLAT to hear JSW Steel's immunity plea Monday

Source : IANS
Author : IANS
Last Updated: Mon, Oct 14th, 2019, 16:45:03hrs
BPSL case: NCLAT to hear JSW Steel's immunity plea Monday

New Delhi: The National Company Law Appellate Tribunal (NCLAT) will on Monday hear JSW Steel's plea in the Bhushan Power and Steel Ltd (BPSL) case regarding immunity from criminal proceedings in the bank fraud investigation against BPSL's erstwhile promoter.

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.

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.

"BPSL had made payments to various entities by way of RTGS against fictitious purchases of capital goods. In lieu of the RTGS payments, these entities had transferred cash to BPSL which was ultimately traced to have been used for generation of artificial LTCG by jacking up the prices of penny stocks by way of synchronized trading," the ED said.