Sources in the know expect it to be listed for next week. A JSW spokpeserson declined to comment.
Singal's petition reviewed by Business Standard raises several points. One of them being that JSW Steel is disqualified under Section 29A for being a related and connected party within the ambit of the IBC. Bhushan Power & Steel
and JSW Steel were joint venture partners in Rohne Coal Company. According to the petition, IBC provides for an inclusive definition of an associate company and that includes a joint venture company.
According to the petition JSW Steel had submitted an affidavit along with the resolution plan that it had no relations with the corporate debtor and was therefore ineligible under Section 29A.
The related and connected party issue had been raised by the Enforcement Directorate
(ED) in its arguments before the NCLAT.
The ED had attached properties of Bhushan Power & Steel
during its investigations under the Prevention of Money Laundering Act (PMLA) which was challenged. The NCLAT
in its order had held that Bhushan Power & Steel was immune from attachment by the ED.
However, the matter was already in the Supreme Court
as a special leave petition had been filed in the Committee of Creditors vs the Directorate of Enforcement. Therefore, according to the petition, the NCLAT
had erred in vacating the attachment.
The attachment by ED in the Bhushan Power case had irked both financial creditors and bidders alike prompting the government to later introduced a new provision, Section 32A, that provided that no action would be taken against the property of the corporate debtor in relation to an offence committed prior to the commencement of the CIRP.
Singal's petition however contended that the NCLAT had failed to appreciate that Section 32A inserted by the Ordinance did not confer any power upon it to remove the attachment made by the ED under PMLA.
Profits during CIRP
The petition says that JSW does not have any right, title or interest under EBITDA (earnings before interest, taxation, depreciation and amortisation) earned by the corporate debtor during CIRP. Lenders, members of committee of creditors (CoC) and operational creditors are entitled to benefits of EBITDA, it said.
Bhushan Power is believed to have registered EBITDA of around Rs 3,000 crore during the resolution process. The petition argues that if JSW is allowed to take away the EBITDA then it would tantamount to a discount to the bid amount and bring down the consideration to Rs 16,350 crore.
The NCLAT had said that EBITDA during CIRP should go to JSW.