How JSW is Managing Bhushan Power Through Former Employees

Gurugram: A clutch of former employees of JSW Steel Limited (JSW), headed by Sajjan Jindal, have been hired at senior levels in various offices of the ailing and debt-ridden Bhushan Power and Steel Limited (BPSL) despite the fact that JSW has not released the bid value of Rs 19,350 crore to the creditors of BPSL that comprise over two dozen Indian banks (mainly in the public sector) as well as foreign banks, financial institutions and private entities in the country and abroad.

BPSL is a highly indebted sick company. It has more than 19,000 employees located at its three plants and sub-plants in Jharsuguda in Odisha, Kolkata and Chandigarh, its offices in Delhi and Kolkata and its branch offices in 32 different locations across the country.

The appointment of several senior former employees of JSW in BPSL, that has gone through a long drawn-out corporate insolvency resolution process in the National Company Law Tribunal (NCLT), New Delhi, appears to have been planned and managed with the help of BPSL’s monitoring professional, Mahender Kumar Khandelwal, and accounting bigwig EY or Ernst & Young, which had been appointed in January to act as BPSL’s O&M––variously described as “operations and management” and “operations and maintenance”––agency.

These appointments reportedly took place with the approval of BPSL’s steering committee, which is currently overseeing the implementation of the resolution plan for BPSL. So where’s the catch?

Under the Insolvency and Bankruptcy Code (IBC) of 2016, the role of the resolution professional comes to an end once the resolution plan is approved by the adjudicating authority. However, in this case, documents made available to the writer of this article indicate that Khandelwal, the erstwhile resolution professional of BPSL, has continued to issue circulars and e-mail messages as its resolution professional. This appears rather unusual and could perhaps be irregular or even illegal.

On the evening of August 12, this writer sent identical questionnaires by electronic mail to the heads of 28 public and private banks, financial institutions and private entities in India and abroad that had loaned money to BPSL in the past. A separate questionnaire was sent the same day to Khandelwal at the email address he used as a monitoring professional. The following morning, that is, on August 13, questionnaires were sent to Sajjan Jindal, Chairman, JSW Steel group and to Rajiv Memani, Chairman and Regional Managing Partner of EY India.

A spokesperson of the multinational accounting and consultancy group, EY, in India emailed a short statement, which is reproduced later in this article. The article also includes a short statement sent by the “group general counsel” of JSW group. The head of the corporate communications department of Axis Bank responded with a one-liner stating that as per the bank’s policy, it “does not comment on client specific matters.”

Till the time of publication, no other responses had been received. This article will be updated as and when the responses are received.


In 2017, Punjab National Bank––India’s second-largest government-owned bank––launched insolvency proceedings against BPSL under IBC. On July 26, 2017, the NCLT admitted the insolvency petition and BPSL’s resolution process formally commenced. On September 5, 2019, the tribunal approved the resolution plan in JSW’s favour, which was also formally accepted by the committee of creditors (CoC).

JSW then appealed the resolution plan before the National Company Law Appellate Tribunal (NCLAT), New Delhi. On February 17, 2020, the appellate tribunal upheld the order passed by NCLT, subject to certain modifications. The NCLAT directed that the resolution plan be given effect to immediately, in the manner ordered by NCLT and as modified by it.

In principle, JSW was under an obligation to release the bid value to the CoC by March 17, that is, within a month of the NCLAT order. However, JSW has not released the amount of Rs 19,350 crore, five months after the deadline for making the payment.

In a statement to television news channel CNBC-TV18, JSW argued why it would not implement the resolution plan: “The matter is sub judice before the Honourable Supreme Court as all the parties in the last hearing were asked to file their submissions to (the) SC within two weeks in response to the application filed by JSW Steel. Pending adjudication of Appeals and CoC Application before (the) SC the plan is incapable of implementation more so when the assets of BPSL are continued to be attached (sic) by (the) ED (Enforcement Directorate).”

JSW’s reasoning behind not implementing the resolution plan can be questioned. First, no Indian court has stayed the operation or implementation of the resolution plan and the NCLAT order is fully operational. While it is true that NCLAT stayed the resolution plan at the time of admitting the appeal, the stay was vacated at the time of passing the final order on February 17.

Second, the dispute currently pending before the Supreme Court relates to an apparently unrelated case concerning grant of immunity from investigations by the ED into financial fraud allegedly committed by the former promoters of BPSL, Sanjay Singhal and his wife, Aarti Singhal. The ED filed a case against the Singhals and other former directors of the company under the Prevention of Money Laundering Act for allegedly siphoning off Rs 2,348 crore from various banks.

Senior advocate Abhishek Manu Singhvi appeared in the Supreme Court on March 6 and gave an assurance on behalf of the financial creditors that they would return the amounts received from JSW if the case pending in the Supreme Court is decided in favour of the ED.


While JSW seems unwilling to implement the resolution plan or to release the bid value to the financial creditors, it seems to be calling the shots in BPSL through its former employees, with the help of Khandelwal and the EY team, according to sources close to the development.

The resolution plan provides for a mechanism through which BPSL is to be managed in the period between the date of approval of the resolution plan, until its closing date. Paragraph 2(a) of Part A of the resolution plan, as captured in paragraph 140 of the NCLAT order, states that the board of directors of BPSL shall stand “vacated” on the date of approval of the resolution plan and shall not interfere in BPSL’s interim management.

The resolution plan provides for the representatives of three approving financial creditors, with the largest share in the admitted financial debt in BPSL, to form a steering committee that, in turn, would set up a reconstituted board to manage BPSL in the interim period. Khandelwal, who is the erstwhile resolution professional of BPSL, is to act as its monitoring professional in this interim period. What is, however, not clear from the orders passed by NCLT and NCLAT is the exact role and functions of Khandelwal in the interim period.

Ostensibly, Khandelwal can at best work towards maintaining BPSL as a going concern in the interim period and his role as the monitoring professional cannot by any stretch of the imagination be construed as that of an interim Chief Executive Officer or an executive who would call the shots for BPSL through his appointees.

Under Section 23 of the IBC, the resolution professional becomes functus officio once the resolution plan is approved by the adjudicating authority. Thus, the status enjoyed by Khandelwal as the monitoring professional is no longer statutory in nature. The question thus arises as to why he has been issuing circulars to BPSL employees, ostensibly in his capacity as a resolution professional.

Paragraph 140 of the NCLAT’s order notes that the monitoring professional shall enter into “suitable contractual arrangements” with JSW to perform his functions. However, the terms of appointment of Khandelwal are not in the public domain, nor has he disclosed these details on the website of the Indian Institute of Insolvency Professionals (IIIP) of the Institute of Chartered Accountants of India­­ (ICAI)––the body with which Khandelwal is enrolled as an insolvency professional. The point to note is that Khandelwal was to perform his duties subject to the decisions of the reconstituted board of directors, which has not yet been set up.


On January 7, Khandelwal made a disclosure on the website of the IIIP that EY Restructuring LLP (limited liability partnership) had been appointed as the O&M agency with effect from January 1.

A source who is well-acquainted with what has been happening in BPSL told NewsClick on condition of anonymity that the resolution plan provides for the appointment of an independent contractor for the “operation and maintenance” of BPSL’s facilities, not for the “operations and management.”

Another source, who again spoke off the record, said that the words “maintenance” and “management” have been used interchangeably in documents, thereby making the status of the agency somewhat ambiguous.

On the day EY was appointed as the O&M contractor, that is, January 1, 2020, the appeal against the NCLT order was pending before NCLAT and the implementation of the resolution plan was put in abeyance.

The first unnamed source added that EY entered into a joint venture with S R Batliboi to form SRBC & Co. LLP, which is currently JSW’s auditor. Was this an instance of conflict of interest, the source wondered, adding that these facts had not been fully disclosed by Khandelwal to IIIP. The disclosure by Khandelwal also does not mention the names or other details of the individuals appointed.

According to a circular seen by this writer, the EY team comprises several individuals. At least six of them, who have held senior positions in JSW in the past, have come on board as members of the EY team. They are:

  1. Pochappan Sasindran, former chief operating officer (COO) of JSW;
  2. Ranga Rao R V Ramachandruni, former vice president (commercial) of JSW;
  3. Bidyut Kumar Das, former vice president (projects) of JSW;
  4. Poyyamozhi Venkatachalam, former vice president of JSW;
  5. Ravindranath Kolli, former vice president (projects) of JSW; and
  6. Major Prashant Kumar Das, former head (human resources).

All these six individuals, who got initial access to BPSL facilities under the EY banner and have been using the EY domain email addresses (, were formally employed in different BPSL offices in or around April 2020. They appear to be running the show in BPSL, holding meetings, issuing directions and circulars over email to BPSL’s employees on various issues.

The second unnamed source claimed that the last-named out of the six (P K Das) was not part of the core managerial team, that the first three (Sasindran, Ramachandruni and B K Das) had been appointed by EY and Khandelwal, while two (Venkatachalam and Kolli) had been appointed by BPSL with the approval of the steering committee that included Khandelwal.

This source added that it was not surprising that former senior employees of JSW, who had retired, had been appointed in important managerial positions in BPSL. The source said: “The Indian steel industry is oligopolistic with a small number of players, including JSW, Tata Steel and the public sector Steel Authority of India Limited (SAIL). Hence, it is not uncommon that there will be a revolving door among experienced executives.”

The source said till such time that EY is in charge of BPSL’s operations, it will ensure that only authorised personnel (including former JSW employees) get access to the company’s facilities in different parts of the country.

A spokesperson of EY in India emailed the following statement to this writer: “EY Restructuring LLP has been appointed by the monitoring committee of Bhushan Power and Steel Limited, comprising key lenders to the company and the resolution professional. Our scope of work is to maintain the company as a going concern and we are committed to bringing all the necessary capabilities to deliver on this mandate.”

Ravi Sabharwal, group general counsel of the JSW group, stated over e-mail: “We have reviewed the letter and find that the observations made therein have to be addressed by the Resolution Professional Mr. M.K. Khandelwal. You are thus advised to direct your queries to the Resolution Professional.”

As already stated, no response has been received so far from Khandelwal.


The steering committee, which is meant to oversee the implementation of the resolution plan, includes representatives of the country’s largest bank, the State Bank of India, and Punjab National Bank, the two financial creditors with the largest share in the admitted financial debt of BPSL. Other public sector banks who are financial creditors include:

  1. Bank of Baroda,
  2. Bank of India,
  3. Canara Bank,
  4. Allahabad Bank,
  5. Union Bank of India,
  6. Andhra Bank,
  7. Indian Bank,
  8. UCO Bank,
  9. PNB International Bank,
  10. Corporation Bank,
  11. South Indian Bank,
  12. Syndicate Bank,
  13. Indian Overseas Bank,
  14. Oriental Bank of Commerce,
  15. Bank of Maharashtra,
  16. Indian Bank,
  17. Union Bank of India,
  18. United Bank of India,
  19. Vijaya Bank, and
  20. IDBI Bank

Some of these banks have merged into other banks. Other public sector undertakings that are creditors to BPSL include Life Insurance Corporation. Creditors that are private banks include ICICI Bank and Axis Bank. Foreign and domestic banks and financial institutions that have loaned money to BPSL include UniCredit Bank of Austria, Bank of America, Assets Care and Reconstruction Enterprise (ACRE), Bayern LB, KfW IPEX Bank of Germany and Indian private lender Edelweiss Financial Services.

Under the IBC, financial creditors are supposed to play an important role in ensuring that the corporate debtor (in this case, BPSL) remains a going concern and that it revives as soon as possible. During the corporate insolvency resolution process, the CoC is empowered to appoint and dismiss the resolution professional who must always act under the directions of the committee.

Once the resolution plan is approved, new appointments in BPSL cannot be made until and unless a change of management takes place and the bid value is duly released to the financial creditors. In other words, in this case, the power to appoint senior executives rests solely with the steering committee.

One of the unnamed sources quoted earlier argued that in the case of BPSL, the steering committee has taken a “casual and negligent approach” in managing the company and implementing the resolution plan. The appointments are apparently contrary to a letter issued in March by the CoC to JSW stating that it will revoke access to BPSL facilities that was earlier granted to JSW employees in the event that JSW does not release the bid value within seven days from the date of receipt of the letter.


As mentioned, the author of this article had not received any response from all but one of the banks and other lending entities to whom the questionnaires had been emailed. Here is the full text of the questionnaire:


I introduce myself as an independent freelance journalist with 43 years of work experience who is accredited with the Press Information Bureau of the Government of India.

On September 5, 2019, the National Company Law Tribunal, New Delhi approved the Resolution Plan for Bhushan Power & Steel Limited (also known as the corporate debtor) in favour of JSW Steel Limited. You may be aware that till now, JSW Steel Limited has not released the payment of the bid value of Rs 19,300 crore. JSW Steel Limited has issued a public statement that it will not implement the resolution plan until an allied legal dispute is heard and decided by the Supreme Court of India.

While JSW Steel Limited has refrained from implementing the Resolution Plan and from paying the bid value to creditors, the company has secured entry into the West Bengal and Odisha plants of Bhushan Power & Steel Limited (BPSL) under the banner of Ernst & Young (E&Y), which was appointed as the operations and management (O&M) agency by the monitoring professional, Mahender Kumar Khandelwal, on January 1, 2020.

I seek your responses to the following five (5) sets of questions for inclusion in an article I am writing for publication in the NewsClick web portal.

  1. Who approved the appointment of the monitoring professional M K Khandelwal? When was the appointment approved?
  2. Did your organisation/entity/bank/financial institution approve the appointment of E&Y Restructuring LLP as the O&M agency?
  3. Are you aware that at least six former employees of JSW Steel Limited have been formally employed in BPSL in senior positions from around the month of April 2020? Are you aware that these individuals have been holding meetings in BPSL and have been issuing circulars/e-mails to BPSL employees? (The names of the six former employees of JSW Steel mentioned are then specified.)
  4. Is the concerned officer/manager in your bank/entity who is looking after the implementation of BPSL’s resolution plan in contact with Khandelwal? Did the concerned person bring to your notice any alleged irregularities at any point in time and if yes, what action was taken?
  5. Under the Insolvency and Bankruptcy Code, 2016, the role of the resolution professional comes to an end once the resolution plan is approved by the adjudicating authority. However, based on documents seen by me, Khandelwal, the erstwhile resolution professional of BPSL has continued to issue circulars in the capacity of resolution professional. Is this in your knowledge?


On March 19, the CoC wrote to JSW asking it to implement the resolution plan within seven days, failing which bank guarantees would be invoked. On June 20, the committee again wrote to JSW granting the company two weeks more to release the payment to avoid penal consequences under Section 74 of the IBC, which penalises those responsible for non-implementation of the resolution plan.

The Reorg website reported in July that the CoC had written a letter to JSW stating that it would add interest charges as compensation for failure to implement the resolution plan in a timely manner. However, till date, no action has been taken by the creditors against JSW.

Apparently, until the change of management formally takes place and till such time as the bid value is released to the creditors, JSW should not have any say whatsoever in the interim management of BPSL. This is also clear from a perusal of the resolution plan approved by the NCLT and the NCLAT, which unambiguously underlines the mechanism for interim management of the BPSL.

The question that needs asking is how under the watch of the steering committee, JSW’s ex-employees were formally inducted into BPSL as full-time senior employees who would take complete charge of the operations and management of the sick, heavily-indebted company. The manner in which this has been done appears to have subverted the letter and spirit of the Insolvency and Bankruptcy Code.

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