The recent ₹3,805-crore scam involving Bhushan Power and Steel unearthed by Punjab National Bank may complicate the acquisition of the company by JSW Steel.
JSW Steel had emerged the top bidder for the debt-laden company during the insolvency process. The key question is whether the new owner will be able to take control of the tainted assets.
While Insolvency and Bankruptcy Code says that criminal proceedings against the stressed asset should be dealt separately, the recent Delhi High Court ruling that the money laundering law — Prevention of Money Laundering Act — prevails over the Insolvency and Bankruptcy Code when it comes to attachment of properties obtained from proceeds of crime. The money recovered from ‘tainted asset’ should be credited to the government, it said. Read More