Several companies that are undergoing proceedings under the Insolvency and Bankruptcy Code (IBC) are also facing investigations by the ED over alleged money laundering by their promoters.ED, which is an investigative arm of the finance ministry, has claimed that it could attach such assets under the Prevention of Money Laundering Act (PMLA). It has seized some assets of Bhushan Steel & Power, posing challenges to the ongoing resolution process for the company.
“We are applying our minds to it … Let us see how we can resolve it,” she said.
The Ministry of Corporate Affairs (MCA) and the ED have locked horns over the attachment of Bhushan Power & Steel’s properties. The case is currently being heard by the National Company Law Appellate Tribunal. The ED in its affidavit to the tribunal said that insolvency courts did not have the jurisdiction to direct the agency to release assets attached under the PMLA.
The MCA, in consultation with the Department of Financial Services, had backed the creditors of Bhushan Power & Steel and the company that sought to acquire it, JSW Steel, before the tribunal, arguing that while the ED was free to attach the personal assets of the erstwhile promoters who had allegedly committed fraud, it did not have the jurisdiction to seize the assets of the company.
“On this matter, I had some discussions. I am conscious of the fact that the ED does its duty and job, and when it comes to the question of attaching such properties of people who are being pursued under the PMLA, some of the company property are also getting attached,” the minister told reporters.
INCOME TAX, MTNL-BSNL MERGER
Asked about a possible cut in personal income tax rates, the finance minister said: “As regards income tax at the stage, there may not be much for me to say … People have spoken about it.”
On the government’s decision to merge state-run telecom operators MTNL and BSNL, she said: “We recognise the role that BSNL and MTNL and the combined institution have to play in the country’s telecommunication and connectivity.”