Enforcement Directorate Returns Rs 4025 Crore Worth Of Assets To JSW Steel

The Enforcement Directorate (ED) has returned assets worth approximately Rs 4025 crore to JSW Steel, following a directive from the Supreme Court. These assets had previously been attached by the ED under the Prevention of Money Laundering Act (PMLA) after Bhushan Power and Steel Limited (BPSL) was accused of defrauding banks.

Five years ago, the ED had seized assets belonging to Bhushan Power and Steel, including land, buildings, and machinery in Odisha, in connection with a money laundering case linked to alleged bank loan defaults. The ED attached the property under Section 5 of the PMLA after accusing the former promoters of BPSL of manipulating loans and diverting bank funds for personal investments.

Corporate Resolution Process (CIRP) Transfers Ownership

JSW Steel later acquired the attached property of Bhushan Power and Steel Limited through the Corporate Resolution Process (CIRP) under the Insolvency and Bankruptcy Code (IBC). The Supreme Court’s ruling has now facilitated the return of assets worth Rs 4025 crore to JSW Steel under Section 8(8) of the PMLA, in conjunction with Rule 3A of the PMLA Property Restoration Rules.

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The ED had accused BPSL’s former management, including then-CEO Sanjay Singhal and his family, of financial manipulation. The promoters allegedly showed Rs 695.14 crore as capital for BPSL by creating artificial long-term capital gains using bank loans, which were exempt from income tax. Additionally, promoter companies falsely presented Rs 3330 crore as equity investment. Reportedly, they funneled this amount through bank loans and advanced it to shell companies controlled by entry operators, further inflating the company’s financial standing.

Restoration Of Assets Marks A Significant Development

The return of these assets to JSW Steel marks a significant development in the long-running legal proceedings, with the ED following the Supreme Court’s order to restore the seized properties. The case highlights ongoing efforts to address financial fraud in India’s corporate sector and the enforcement of the PMLA.