NEW DELHI: Public sector lender State Bank of India (SBI) has issued fresh notices to Bhushan Power and Steel Limited’s (BPSL) promoter Sanjay Singal, seeking to invoke his personal guarantee for Rs 12,276 crore of loan defaults by the bankrupt company since 2017.
The notice was issued on August 31, under the Indian Contract Act 1872 and other applicable provisions relating to the liability of the guarantor. In the notice, SBI further added if he (Singal) believes that the debt has been repaid before the receipt of the notice, he is required to furnish relevant documents demonstrating such repayment within 14 days.
Meanwhile, the beleaguered firm’s debt resolution is almost ready as SBI had already filed an insolvency case against BPSL in July, 2017 and JSW Steel has been identified as the highest bidder for BPSL under the Insolvency and Bankruptcy Code-led resolution, with an offer of Rs 19,700 crore. The company has a debt of over Rs 48,000 crore to a consortium of 31 lenders including SBI, and Punjab National Bank.
However, the matter is pending before the Supreme Court as Singhal has moved the apex court against the
National Company of Law Appellate (NCLAT) order, while JSW Steel wanted immunity on the investigations being done by Enforcement Directorate (ED), CBI and Serious Fraud Investigation Office. In October 2019, the ED attached assets worth over Rs 4,025 crore of BPSL in connection with its money laundering probe linked to an alleged bank loan fraud by the company’s former promoters.
Last Friday, the apex court, however, gave another two weeks to both the ED and BPSL promoter Singal to make their final submissions. On the other hand, JSW Steel has urged the SC to pronounce its final judgement in this case as it has been waiting for over three years now.