The Enforcement Directorate has alleged that goods belonging to Bhushan Power & Steel Ltd. were removed in an unauthorised way, both prior and during the insolvency proceedings against the company.
The insolvent company's resolution professional Mahender Kumar Khandelwal was involved in the fraud, the enforcement agency said in its official twitter handle today.
The probe agency also said it searched Khandelwal's premises and has seized incriminating documents and digital records showing huge cash transactions that were made by him.
1. ED unearths clandestine removal of goods worth Rs.700 crores of M/s Bhushan Power & Steel Limited both prior and during proceedings before NCLT with due involvement of M.K. Khandelwal, Resolution Professional and former Director of BPSL in #bankfraudcase
2. During the search of the premises of Khandelwal and Director of BPSL incriminating documents indicating huge cash transactions by M.K. Khandelwal, Resolution Professional, digital records, jewellery worth Rs.86 lakh were seized in a #bankfraud case.
BloombergQuint has sought a comment from Khandelwal and is awaiting his response.
This is not the first instance where his conduct has been questioned. India's bankruptcy regulator had imposed a penalty on Khandelwal in November last year alleging that he violated the rules for insolvency professionals by not disclosing existing engagements and displaying a “negligent approach” and misunderstanding of the insolvency code during the resolution process of Bhushan Power and Steel.
Punjab National Bank had initiated insolvency proceedings against Bhushan Power after it defaulted on its payment obligations. The bank's application was admitted by the National Company Law Tribunal in June 2017 after which the resolution professional admitted claims exceeding Rs 47,200 crore from financial creditors.
After lengthy legal proceedings, the dedicated insolvency tribunal had approved JSW Steel's $ 2.7-billion bid for Bhushan Power in September last year. The deal, however, faced challenges when the NCLT refused to grant immunity to Bhushan Power from ongoing criminal investigations. The Central Bureau of Investigation had filed a first information report against the company and some of its erstwhile directors. Similarly the ED had also filed a case of money laundering against the company.
The Supreme Court is yet to decided on whether Bhushan Power can be granted immunity from past criminal liabilities.
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