BPSL's ex-RP files review plea in SC over cancellation of JSW Steel takeover
Bhushan Power and Steel
's (
BPSL
) former resolution professional (RP)
Mahender Khandelwal
has filed a
review petition
in
Supreme Court
which has cancelled
JSW Steel
's
resolution plan
for the company, according to sources in the know.
The apex court had on 2 May cancelled the five year old takeover of Bhushan Power and Steel by JSW Steel.
The RP has claimed that certain documents were overlooked in the judgement. He claims he had undertaken a review to ensure
JSW Steel
's past connection with BPSL was checked.
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He also claimed he had filed the Form H as required from an RP. He also claims he sought relevant extension from
NCLT
and
NCLAT
for condoning delays in the resolution process.
The Supreme Court had found several flaws in the resolution process including delays in implementation of the resolution plan by JSW Steel. It had said creditors received payments with a delay of 540 days.
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The RP has also claimed he had filed avoidance applications to identify and rectify transactions that were undertaken under BPSL's former management that were detrimental to the company's interest. As per established procedure, the RP is supposed to identify wrongful transactions and report them to national company law tribunal. The apex court in its judgement had found deficiencies on this count as well by BPSL's RP.
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Business Standard
2 days ago
- Business Standard
Bhushan Steel's former resolution professional files review petition in SC
The former resolution professional (RP) for debt-laden Bhushan Power and Steel (BPSL), Mahender Khandelwal, has filed a review petition in the Supreme Court (SC), which had earlier rejected the resolution plan of JSW Steel and ordered liquidation. Khandelwal filed the petition on Friday, arguing that the apex court had overlooked certain critical documents and procedural compliances and committed certain 'errors apparent' while recording the judgment. On the matter of verifying the eligibility of the successful resolution applicant (in this case JSW Steel) under Section 29A of the Insolvency and Bankruptcy Code (IBC), Khandelwal has claimed that a thorough and independent verification was conducted. A leading third-party consultancy firm was appointed to assess JSW Steel's eligibility, and the findings were shared with the committee of creditors (CoC) of BPSL, with no objections raised. On 2 May, the Supreme Court delivered its judgment, pointing to 'an entire spectrum of lacunas and flaws' in the resolution plan of JSW Steel regarding non-compliance with mandatory requirements under the IBC. The verdict came four years after JSW Steel had acquired BPSL under the IBC. The apex court criticised both the RP and the CoC. It held that the RP had failed to discharge his statutory duties under the IBC and the corporate insolvency resolution process (CIRP) regulations. The CoC, it said, had failed to exercise its commercial wisdom and approved a resolution plan that contravened mandatory IBC provisions. Lenders including the State Bank of India and Punjab National Bank have already filed review petitions before the Supreme Court. On 25 June, JSW Steel, too, filed a review petition. In his plea, Khandelwal contended that the joint shareholding of BPSL and JSW Steel in a joint venture entity had been disclosed in the resolution plan and formed part of the record before the Supreme Court. He also submitted that the required compliance certificate (Form H) was filed along with the application seeking approval of the resolution plan before the National Company Law Tribunal (NCLT), and was part of the court record. Khandelwal further stated that an appropriate application had been made for the extension of the CIRP period beyond 180 days, and the relief was granted by the NCLT. The National Company Law Appellate Tribunal (NCLAT), he noted, had directed the exclusion of the time spent on litigation from the computation of the 270-day CIRP period. Therefore, the resolution plan approval application filed by the RP was submitted before the expiry of the 270-day CIRP period, Khandelwal said. The Supreme Court is expected to take up the review petition once it resumes after the summer recess on 14 July. JSW Steel is also expected to cite what it claims are factual errors in the original order in its review petition.
Time of India
2 days ago
- Time of India
Bhushan Power liquidation will hurt all stakeholders, JSW Steel and lenders tell SC
New Delhi: JSW Steel has transformed Bhushan Power & Steel Ltd (BPSL) into a viable and going concern after acquiring it out of bankruptcy in 2021, and its liquidation would have adverse ramifications on all stakeholders, the Sajjan Jindal-led steelmaker and BPSL's lenders told the Supreme Court . They also sought an "open court" hearing of their petitions seeking a review of the top court's May 2 order scrapping JSW's acquisition of BPSL under the bankruptcy law. While JSW filed the review petition on Wednesday, the lenders that include Punjab National Bank and State Bank of India approached the top court with their plea last week. JSW said it transformed the bankrupt firm's financial health and that its operational capacity has almost doubled to 4.5 million tonnes per annum now from 2.3 MTPA in 2017. BPSL's sales have since increased almost three times to ₹25,973 crore in the last fiscal year ended March 31 and exports have resumed with an annual average of ₹2,976 crore in the last four years, the company said in the review petition. BPSL contributed ₹16,900 crore in taxes to the exchequer since 2021, the petition stated. Also, JSW Steel , which acquired BPSL under a ₹19,350-crore resolution plan, has made a capital investment of ₹5,788 crore in it. In its order on May 2, the top court had termed JSW's resolution plan for BPSL 'illegal' and 'in gross violation' of the Insolvency and Bankruptcy Code (IBC). The court had also directed the National Company Law Tribunal (NCLT) to initiate liquidation proceedings against BPSL. The SC later ordered status quo on the liquidation proceedings, after JSW Steel and the lenders said they would file review petitions. About the allegation in the May verdict that JSW suppressed existence of a joint venture agreement with BSPL on the Rohne Coal block, the company's review petition said it had made due disclosures about it in the resolution plan and even the National Company Law Appellate Tribunal (NCLAT) had noted them. 'When the ED (Enforcement Directorate) first raised the issue before NCLAT to clarify the relationship further, the petitioner (JSW) voluntarily submitted the JV agreement before NCLAT, despite there being no requirement to do so under law, to explain the background of formation of the JV,' the review petition filed through Karanjawala & Company said. Supporting JSW's claims, the lenders said the resolution plan was successfully implemented by March 2021 and that the company had made an upfront payment of ₹19,350 crore. The banks in their review plea said the May 2 judgement suffered from 'patent errors' on the face of the record. '…the impugned judgment's observations with respect to the JSW's eligibility under Section 29A being doubtful, not being properly verified by inter alia the CoC (committee of creditors) or not being supported by documents on record constitute an error apparent on the face of the record,' the lenders said, adding that the issue was not argued before the SC and hence, the observations in relation that were in violation of the principles of natural justice. Section 29A of the IBC details conditions under which some individuals and entities are disqualified from submitting a resolution plan. With regard to the SC finding that equity infusion of ₹8,550 crore as mandated by the resolution plan was not complied with and there was no material on record to substantiate that, the banks submitted that this 'conclusion has been reached without adequately considering that there is in fact documentary evidence, particularly minutes of meeting of the reconstituted board on March 26, 2021, to substantiate infusion of ₹8,550 crore equity.' The May judgement failed to consider the factors that contributed to the delay in equity infusion, according to the banks' review plea filed through law firm Cyril Amarchand Mangaldas. The petition also noted that the ED order for provisionally attaching BPSL assets had been issued on October 10, 2019, about 35 days after the NCLT approved the dent resolution plan on September 5 that year. 'The attachment by the ED was effectively released approximately five years later' on December 11, last year, the banks said in the petition. The lenders told the SC that the May 2 judgement will likely have significant ramifications on future resolution plans because it might create uncertainty with respect to their implementation. Also, implementation of plans may effectively come to a standstill pending final adjudication of all legal challenges to the plan, which can take several years, they said. BSPL owed more than ₹47,000 crore to lenders when the Reserve Bank of India put it on a list of companies for bankruptcy resolution in 2017. The NCLT began the resolution process in July that year, based on a petition filed by lead lender Punjab National Bank , which also initiated criminal proceedings in 2019 against former directors of the company after unearthing a ₹3,800 crore alleged fraud. JSW Steel acquired BPSL in March 2021 after its proposal was approved by the CoC and the NCLAT. The NCLT had 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 upheld that decision in February 2020.
Time of India
2 days ago
- Time of India
BPSL's ex-RP files review plea in SC over cancellation of JSW Steel takeover
Bhushan Power and Steel 's ( BPSL ) former resolution professional (RP) Mahender Khandelwal has filed a review petition in Supreme Court which has cancelled JSW Steel 's resolution plan for the company, according to sources in the know. The apex court had on 2 May cancelled the five year old takeover of Bhushan Power and Steel by JSW Steel . The RP has claimed that certain documents were overlooked in the judgement. He claims he had undertaken a review to ensure JSW Steel's past connection with BPSL was checked. He also claimed he had filed the Form H as required from an RP. He also claims he sought relevant extension from NCLT and NCLAT for condoning delays in the resolution process. The Supreme Court had found several flaws in the resolution process including delays in implementation of the resolution plan by JSW Steel. It had said creditors received payments with a delay of 540 days. The RP has also claimed he had filed avoidance applications to identify and rectify transactions that were undertaken under BPSL's former management that were detrimental to the company's interest. As per established procedure, the RP is supposed to identify wrongful transactions and report them to national company law tribunal. The apex court in its judgement had found deficiencies on this count as well by BPSL's RP.
