JAL Lenders Flag Leak that May Have Facilitated Vedanta Bid

Jaiprakash Associates Insolvency Proceedings Hit by Allegations of Information Leak

Mumbai/New Delhi: The Committee of Creditors (CoC) in the insolvency proceedings of Jaiprakash Associates Ltd (JAL) has raised concerns about a possible information leak that may have prompted Vedanta Ltd to revise its bid for the bankrupt firm.

According to Solicitor General Tushar Mehta, who appeared before the National Company Law Appellate Tribunal (NCLAT) on behalf of the CoC, Vedanta was initially lagging in the first and fifth parameters, but somehow came to know about the information, compromising the integrity of the process. Mehta argued that after the alleged leak, Vedanta submitted a revised offer, increasing values in parameters one and five - net present value (NPV) and equity infusion - where it had earlier lagged.

The CoC rejected the revised bid as it was submitted after the deadline. National Asset Reconstruction Company Ltd (NARCL), one of the largest voting members in the CoC, argued that accepting the revised offer would require restarting the process and delay resolution. Advocate Niranjan Reddy, representing the CoC, stated that Vedanta understood it was not going to succeed after the bidding concluded and came up with the revised offer.

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Key Developments in the JAL Insolvency Case

The next hearing in the case is scheduled for 21 April. Lawyers said the development could strengthen Vedanta's case in the proceedings. "It's a process integrity issue, and Vedanta can argue that there was no level playing field in this case," said Arka Majumdar, partner at Argus Partners.

Vedanta's counsel, Abhijeet Sinha, rejected the allegations as "baseless" and stated that the company had not suppressed any documents and presented everything in court. Vedanta has also accused the CoC of ignoring its bid despite it being the highest after five rounds of the challenge process.

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JAL entered insolvency proceedings in 2024, with over ₹50,000 crore owed to creditors. The contest for JAL's assets includes nearly 4,000 acres of land across Noida, Greater Noida, and the Yamuna Expressway, along with hotels, commercial assets, cement capacity, and a Formula 1 racing track. Adani Enterprises' resolution plan was approved by the Allahabad bench of the National Company Law Tribunal (NCLT) on 17 March, after which Vedanta approached the NCLAT and the Supreme Court seeking a stay.

On 6 April, a Supreme Court bench led by Chief Justice Surya Kant and Justice Joymalya Bagchi declined to interfere with orders of the NCLT and NCLAT that cleared the plan's rollout. However, it directed the committee overseeing the resolution to seek prior NCLAT approval before taking any major steps.