Essar Steel’s suspended management had demanded that the resolution plan be sent back to the committee of creditors as the management was kept away from its right to participate in the meetings to consider the resolution plan of ArcelorMittal.
The Ahmedabad bench of the National Company Law Tribunal (NCLT) on Wednesday reserved its order on a plea of the
suspended management of distressed Essar Steel.
The two-member bench of NCLT, comprising HP Chaturvedi and Manorama Kumari, reserved the order after hearing the counsel of Essar Steel’s suspended management.
The counsel demanded that the resolution plan be sent back to the committee of creditors (CoC) as the management was kept away from its right to participate in the meetings to consider the resolution plan of ArcelorMittal.
Citing the Supreme Court judgment which came on January 31, 2019, the counsel said the order directed that suspended board members of a company be included in all deliberations of the CoC, including that of resolution plan.
Under this judgment, the suspended management of Essar Steel was entitled for both the plans submitted by Vedanta and ArcelorMittal. The counsel further told the NCLT that it should also have the right to comment in both the plans.
“Copies of the plan should be given to operational creditors if they seek as a group and have more than 10% share of total debt. Financial creditors ought to vote only after comments by suspended directors,” he argued.
Opposing the plea, CoC counsel blamed that ESL promoters for merely interested in scuttling the process as they remained silent for almost over a year and didn’t even seek copies of the resolution plan. As Essar Steel promoters have also made a settlement proposal to pay off all debt, the resolution plan cannot be given to them as part of confidentiality. The counsel for ArcelorMittal, too, opposed the plea on the same ground.