Finshots Daily
The Bhushan Power & Steel rewind no one asked for
Podcast summary created with Snipd AI
Quick takeaways
- Bhushan Power and Steel's downfall highlights the severe consequences of excessive borrowing and financial mismanagement, impacting thousands of crores and numerous banks.
- The Supreme Court's ruling against the resolution plan raises unsettling questions about the reliability of India's insolvency framework and the future of corporate accountability.
Deep dives
The Collapse of Bhushan Power and Steel Limited
Bhushan Power and Steel Limited (BPSL) faced a catastrophic downfall due to excessive borrowing, amassing a debt of over 47,000 crore rupees to approximately 30 banks. Despite being approved for a resolution in 2019, a series of unfortunate events unfolded, including accusations of fraud against its promoters and financial mismanagement during its expansion phase. The situation escalated when a significant Supreme Court ruling recently rejected the approved resolution plan, citing numerous violations of the Insolvency and Bankruptcy Code (IBC), including failure to meet the stipulated 270-day resolution timeline. As a result, BPSL's future is now uncertain, potentially facing liquidation and reigniting discussions around corporate accountability and financial stability in India.
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