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(Photo: Reuters)
(Photo: Reuters)

CoC of BPSL pledge before SC to return money on its sale within two months

The conditions of Bhushan Power and Steel Ltd's takeover are being appealed by the steel mill's former promoter

New Delhi: The Supreme Court on Friday accepted the declaration of the Committee of Creditors (CoC) of Bhushan Power and Steel Ltd (BPSL) that in case the apex court rules in favour of the former promoter against the steel mill's sale, the lenders will return the resolution proceeds within two months. The CoC urged the court that a further delay in the resolution process significantly adds to its outstanding non-performing assets.

The current appeal pertains to the sale of the bankrupt BPSL to JSW Steel. The conditions of its takeover are being appealed by the steel mill's former promoter.

The matter was listed before the apex court bench headed by Chief Justice S.A. Bobde and the declaration was made by senior advocate Abishek Manu Shinghvi, who appeared for CoC.

The bench, also comprising Justices B.R. Gavai and Surya Kant, were hearing the petition filed by promoter of Bhushan Power's Sanjay Singal. Singal has claimed that Bhushan Power and JSW steel are “related party", hence ineligible to bid. The court has directed that it shall hear the Sanjay Singal’s petition and other related matters together on 15 April.

The three-judge bench had also contemplated to put status quo in the present case but when the bank argued that a status quo would add another 200 bln to banks' non performing assets, the court decided against it.

India’s top bankruptcy court on 17 February had approved the sale of distressed Bhushan Power and Steel Company to JSW Steel. The court also gave the buyer immunity from investigations into financial fraud allegedly committed by the former owners of the steel firm.

Bhushan Power was part of the original dirty dozen cases identified by the Reserve Bank of India to be referred to bankruptcy courts. JSW Steel, with an offer of 19,700 crore for the bankrupt steel mill, was the highest bidder for the asset. However, the Enforcement Directorate, which is pursuing an investigation into alleged money laundering by the company under its previous management, attached the assets of the steel mill, stalling its sale.

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