VTB Capital-led Numetal on Monday said in the National Company Law Appellate Tribunal (NCLAT) that its rival AreclorMittal should not be made eligible to bid for Essar Steel as it is yet to clear dues of two defaulting firms – Uttam Galva Steels and KSS Petron.
“It’s an admitted fact that AreclorMittal Netherlands, a 100% subsidiary of AreclorMittal, was a promoter of Uttam Galva. If AreclorMittal through AreclorMittal Netherlands is an admitted promoter of Uttam Galva, which was admitted as an NPA, then it is ineligible,” said senior counsel Mukul Rohatgi, appearing on behalf of Numetal.
Refuting ArcelorMittal’s contention, made earlier before the appellate tribunal, that it was not a shareholder either in Uttam Galva or in KSS Petron prior to putting its bid for Essar Steel (ESIL) on February 12, Rohtagi said, as per Sebi regulations, a promoter ceased to be a promoter only after shares of the company are declassified by the exchanges.
“ArcelorMittal was, thus, not eligible to bid for Essar Steel, as on February 12, because it did not cease to be a shareholder/promoter as the declassification was done on only on March 21 in the NSE and on March 23 on the BSE,” he said.
Rohatgi said ArcelorMittal could have cleared its dues and become eligible had it paid the entire Rs 7,000 crore dues for Uttam Galva and KSS Petron, which it has not done so far. Uttam Galva owes Rs 6,000 crore to the lenders while KSS Petron the remaining Rs 1,000 crore.
The senior counsel said probably that was the reason why the resolution professional for the debt-ridden company also adopted ArcelorMittal’s disqualification.
Last week, ArcelorMittal said that it was not a shareholder either in Uttam Galva or in KSS Petron, prior to putting its bid for Essar Steel (ESIL) on February 12. The company did not have shares in Uttam Galva as on February 7 and in KSS Petron as on February 9.
The two-member NCLAT bench, headed by Justice SJ Mukhopadhyay, will hear the matter again on July 17.