In a blow to the resolution process of Bhushan Power and Steel's insolvency case, the PMLA court has ordered provisional attachment of the company's properties worth Rs 4,025 crore by the Enforcement Directorate (ED). The properties to be attached include land, buildings and machinery of Bhushan Power and Steel's plant in Sambalpur district of Odisha.
The attachment order came after two banks - Punjab National Bank and Allahabad Bank - had earlier accused the ex-promoters and directors of Bhushan Power and Steel of fraudulently availing loans worth over Rs 5,500 crore.
Passing the order of attachment, the additional director, PMLA office, argued that if the property is not attached then the same could change hands creating a 'bona fide' third party interest in any other proceedings creating difficulties in retrieving the same in future.
The property has been attached for 180 days and until further order of the PMLA office, it cannot be disposed off, transferred or dealt with in any manner.
Bhushan Power and Steel is under insolvency proceedings, and JSW Steel has emerged as the successful bidder with a bid of Rs 19,500 crore against loan dues of Rs 48,000 crore.
However, while accepting JSW Steel's resolution plan the National Companies Law Tribunal (NCLT) refused to give immunity to JSW Steel from any criminal proceedings against the ex-promoters and directors of Bhushan Power and Steel if such proceedings lead to recovery of money siphoned off by these people.
The NCLT observed the resolution applicant (JSW) should adhere to the existing laws as the resolution plan should not be against any provisions of the existing laws.
This order did not go down well with JSW Steel as it wanted a clean company to acquire. It apprehends that any attachment or seizure of Bhushan Power and Steel's properties because of the criminal proceedings may undermine the value of the assets acquired.
JSW Steel has appealed against the order in NCLAT. The case will be heard on Monday.