JSW Steel shares crash 6% all of a sudden; here is what happened

A Bench of the Supreme Court ruled that the CoC's approval of JSW Steel's bid for BPSL was contrary to the provisions of the Insolvency and Bankruptcy Code (IBC) and cannot be sustained.

"The plan was illegal and ought not to have been entertained,” the court observed while ordering the commencement of liquidation proceedings against the debt-ridden steelmaker, said a report by Law Trend.

"In 2020, the Enforcement Directorate filed a prosecution complaint naming Bhushan Power and Steel Ltd, along with its then Chairman and Managing Director, in a money laundering case linked to an alleged bank fraud of ₹47,204 crore. The case had significantly complicated the resolution process," the report added.

OCD stands for optionally convertible debentures. These are debt instruments that allow companies to raise capital from investors.

The second reason why the resolution plan was rejected was for failing to complete the BPSL resolution plan within the prescribed time.

Following the development, the benchmark indices also retreated from the day's highs. At 12:13 PM, the S&P BSE SENSEX was trading at 80,395.24, up 153 points, or 0.19%, while the NSE's NIFTY50 index was trading at 24,307.85, down 26.35 points, or 0.11%.