ED searches BPSL’s resolution professional, probes ‘irregularities’ in ties

The Enforcement Directorate (ED) is probing the resolution professional for Bhushan Power and Steel Ltd (BPSL), potentially hurting JSW Steel’s Rs 19,700-crore bid to acquire the debt-laden company.

The federal agency search on Wednesday four locations belonging to the resolution professional and a former director of BPSL after finding irregularities in their dealings with the company, said sources.

An ED official said that three places in Delhi and one in Gurugram were searched in connection with a money laundering probe against the beleaguered steel firm.

Last year, the ED attached assets worth over Rs 4,000 crore of BPSL for alleged bank loan fraud by the company’s former owners.

The BPSL case is in the final leg of hearing in Supreme Court. The ED has filed an appeal against a National Company Law Appellate Tribunal (NCLAT) order to release BPSL assets attached under the Prevention of Money Laundering Act (PMLA).

The attachment order came about seven months after JSW Steel was declared a successful resolution applicant for the debt-ridden BPSL.

JSW Steel has sought immunity under Section 32A of the insolvency law providing immunity to the corporate debtor. However, the ED was objecting to the applicability of Section 32A of the insolvency law to the JSW-Bhushan deal on two counts.

Primarily, JSW Steel’s resolution plan was approved by the NCLT in October 2019, prior to the introduction of Section 32A. Second, JSW Steel and BPSL are associates in the joint venture firm Rohne Coal Company, which disqualifies the resolution applicant from the purview of Section 32A, being a related party.