Have full control over Bhushan Power and Steel, 'strong grounds' for legal remedies: JSW Steel

Metals major JSW Steel's management told investors that it retains control over its subsidiary Bhushan Power and Steel Ltd (BPSL), which has been ordered to be liquidated by the Supreme Court in a May 2 order, on grounds of "discrepancies" related to the Insolvency and Bankruptcy Code (IBC)-linked resolution process for BPSL, and production and deliveries continue from the BPSL facility even after the apex court order.

The management noted its continued control over BPSL, in response to investors' questions on whether the Union government's Enforcement Directorate (ED) may seek to attach part of BPSL's assets as part of its anti-money laundering investigations into its erstwhile promoters. Industry observers have noted that the ED may be able to re-attach around Rs 4,000 crore of BPSL's assets, after the Supreme Court order noted deviations in the resolution plan, such as delays in payments to creditors.

JSW Steel's joint managing director and CEO Jayant Acharya said during the company's post-earnings conference call on May 23 that the company has taken all steps related to previously indebted-BPSL's resolution process in the National Company Law Tribunal "according to the law". The company's resolution plan for BPSL was approved by the NCLT in 2019. Acharya also added that the company believes it has "strong grounds" for legal remedies after the May 2 Supreme Court order.

The JSW Group-backed entity has also started sending demand notices, worth a total of Rs 19,300 crore, to BPSL's erstwhile creditors after the May 2 order. At the same time, it has sought a 60 day delay in BPSL's insolvency proceedings, according to media reports.