SBI Pleads SC to Recover Loans from JSPL

January 30, 2017 - 10:08:49 AM

SBIIn order to recover its pending dues worth Rs 7,400 crore, SBI-led consortium of eight banks has gone to the Supreme Court to implead it as a party in the mining case related to Jindal Steel and Power (JSPL). It further added that any direction to decline permission to the firm to lift and transport iron ore lying at its long time supplier Sarda Mines Private Ltd (SMPL) plant in the Keonjhar district of Orissa is going to fade its scope of recovery.

Previously during this month, a SBI-led consortium of 12 PSU banks had sought intervention in the Aircel-Maxis case, citing that it realized if the telecom company was restrained from earning revenue by using the 2G spectrum, all the lenders would be impacted because of the non-payment of their outstanding dues to the tune of Rs. 20,000 cr.

SBI-led consortium of 17 banks also sought recovery of more than Rs. 9,000-cr dues from Kingfisher Airlines. All the pleas are outstanding in the SC. The current case relates to processed iron ore stocks lying at the dispatch point of SMPL for onward delivery to JSPL. In March 2014, the mining department had directed SMPL to quit all mining activities on the fact that the tenure of its environment clearance had expired. And on this basis, the department had declined to give transit permit to JSPL for the transportation of procured and processed iron ore.

The SBI-led consortium’s application is coming up for hearing on Monday.

The Odisha government has confronted the high court’s April 2016 order that permitted JSPL to lift 12 million tonne of iron ore from Sarda Mines, whose mine is at present non-operational for the want of clearances. The HC had also asked the state government to issue required orders in order to lift and transport of iron ore from the mines.

The state government has asked the apex court that transporting of extracted ore would also count as mining, and this could not be permitted as the mining operations have been rejected. Apart from this, there may be irregularities in the deal between the two companies, as Sarda Mines is selling iron ore to JSPL way below the market rate.

But, JSPL has asserted that lifting already extracted iron ore is not a mining-related activity.

Seeking intervention in the case pending before the apex court, the lenders are of the view that of the Rs. 7,400 cr working capital limit sanctioned by them, JSPL had paid in advance approximately Rs. 2,000 crore to SMPL for procuring 12.21 million tonne of iron ore fines and 29,000 iron ore lumps (approximate).

As the markets commenced on 30th Jan, SBI share price is trading below 0.69 per cent at Rs. 264.60.

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