As more skeletons tumble out of Bhushan Power and Steels closet, it has put the ongoing insolvency process in danger. With Punjab National Bank (PNB) and Allahabad Bank - two creditors to the company - making allegations of fund diversion to the tune of Rs 5,500 crore (PNB reporting Rs 3,800 crore and Allahabad Bank Rs 1,700 crore), enforcement agencies such as the CBI and the ED may take charge of investigations and, if required, seek permission for attachment of properties.
This may jeopardise the insolvency process as the bidders - in this case JSW Steel, whose resolution plan has been approved by the lenders - may find the offer unattractive.
In case of Rei Agro, another company that was being investigated and whose properties were attached by the ED, the insolvency process failed to attract any bidders as the attached assets could not be claimed. This led to liquidation of the company.
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