Supreme Court Orders ED to Transfer Bhushan Power & Steel Assets to JSW Steel
The Supreme Court has directed the Enforcement Directorate (ED) to transfer Bhushan Power & Steel Limited (BPSL) assets worth ₹4,025 crore to JSW Steel, putting an end to a prolonged dispute. This decision clears the path for JSW Steel to assume complete ownership of the bankrupt company’s properties.
Final Settlement of Ownership
The apex court bench upheld the earlier ruling favoring JSW Steel in its bid to acquire Bhushan Power & Steel under the Insolvency and Bankruptcy Code (IBC). The ₹19,350-crore resolution plan, which JSW Steel proposed and was approved by the National Company Law Tribunal (NCLT), had faced delays due to the ED’s attachment of the BPSL assets during its investigation into alleged money laundering by the previous management.
The Supreme Court clarified that JSW Steel, as the new owner, was protected under Section 32A of the IBC, which grants immunity to buyers of insolvent assets from any criminal proceedings against the former promoters.
Background of the Case
Bhushan Power & Steel was dragged into insolvency in 2017 due to mounting debts exceeding ₹47,000 crore. JSW Steel emerged as the winning bidder in 2019, but the ED froze assets worth ₹4,025 crore during its probe into alleged financial irregularities by the former promoters. This action created a legal impasse over the ownership transfer.
The Supreme Court’s ruling now resolves the deadlock, ensuring the assets are handed over to JSW Steel, which plans to invest significantly in reviving and expanding Bhushan Power & Steel’s operations.
Implications for the Steel Sector
This judgment reinforces the sanctity of the IBC framework, encouraging more participation from private players in acquiring distressed assets without fear of legal complications. Industry experts believe this decision will enhance investor confidence in India’s insolvency resolution process.
The acquisition of Bhushan Power & Steel will bolster JSW Steel’s production capacity and position in the domestic steel market. The company has already indicated its commitment to turning the asset into a profitable venture.
This landmark ruling underscores the judiciary’s role in safeguarding the IBC’s objectives while ensuring economic recovery for distressed sectors. Further steps for asset transfer are expected to proceed promptly following the court’s directive.
