Bhushan Power and Steel (BPSL) lenders including SBI, led by the Punjab National Bank, on Monday moved the Supreme Court seeking review of its May 2 judgment that scrapped the JSW Steel’s acquisition of the debt-laden firm.
The review comes after the apex court had on May 26 ordered status quo on the liquidation proceedings of bankrupt BPSL, giving a big relief to Sajjan Jindal-led JSW Steel, which had warned that the liquidation will be “fatal” to it and other stakeholders, including lenders and workers.
The SC had said that the status quo shall operate till it decided the review petition that was likely to be filed by JSW and lenders against the May 2 judgement that rejected the former’s Rs 19,300-crore resolution plan for BPSL, citing non-compliance with rules.
JSW had asked the Supreme Court to keep the liquidation of BPSL in “abeyance” before the National Company Law Tribunal (NCLT) till the company exhausted all its legal remedies. The liquidation of the company might “jeopardise” the review petition to be filed by JSW Steel, it had added.
JSW is yet to file its review petition, according to the sources.
The May 2 ruling had scrapped JSW Steel’s acquisition of BPSL after four years on the grounds that the resolution plan was “illegal” and “in gross violation” of the Insolvency and Bankruptcy Code (IBC). While directing the NCLT to initiate liquidation proceedings against BPSL, the court had then directed that payments made to financial and operational creditors and the equity contribution by JSW be refunded within two months, as undertaken by the lenders to the bankrupt firm.
Bhushan Power owed over Rs 47,000 crore to lenders when the Reserve Bank of India put it on a bankruptcy resolution list in 2017. The NCLT began the resolution process in July that year, based on the filing of lead lender Punjab National Bank, which initiated criminal proceedings in 2019 against former directors of the company after unearthing a Rs 3,800 crore fraud on its books. PNB and State Bank of India led the CoC. JSW acquired Bhushan Power in March 2021 after its proposal was approved by the CoC and the NCLAT.
The NCLT approved JSW Steel’s offer in 2019 while holding that the successful bidder could not be held responsible for any alleged misdeeds of the previous promoters at any stage. The NCLAT had upheld the decision in February 2020.
Source: Economic Times