The State Bank of India has invoked the personal guarantees of Sanjay Singal, former promoter of Bhushan Power & Steel Ltd, and has sent him a demand notice for recovery of Rs 12,275.91 crore.
The development comes at a time when the resolution process of the bankrupt company hangs in fire and awaits a Supreme Court verdict.
The demand notice, seen by IANS, says that no security is provided by the guarantor “so the entire amount as on August 31, amounting to Rs 12,275.91 crore payable by the guarantor, is unsecured as regards the guarantor”.
The development comes days after the Finance Ministry has asked public sector banks to put in place a mechanism for monitoring cases which may require initiation of insolvency proceedings against the personal guarantors to corporate debtors.
The norms for initiation of the insolvency resolution process for personal guarantors to corporate debtors before the National Company Law Tribunal came into effect in December last year.
JSW Steel has won the bid to acquire the debt-laden company for Rs 19,700 crore after the National Company Law Appellate Tribunal approved its resolution plan.
The much-prolonged resolution of Bhushan Power and Steel Ltd is, however, stuck in its last leg over attachment of BPSL’s assets by the Enforcement Directorate in a money-laundering case.