Tata Steel on Tuesday moved the National Company Law Appellate Tribunal (NCLAT) challenging an April 23 order of the National Company Law Tribunal
Tata Steel on Tuesday moved the National Company Law Appellate Tribunal (NCLAT) challenging an April 23 order of the National Company Law Tribunal which directed the committee of creditors (CoC) to consider the late bid submitted by UK-based Liberty House for Bhushan Power and Steel. NCLAT has listed the matter for hearing on Wednesday.
Apart from Tata Steel, JSW Steel was the only bidder which had submitted a bid for the loss-making steelmaker before the deadline ended on February 8. Liberty House placed its bid for the company only on February 20 and the resolution professional Mahender Khandelwal had rejected it on the ground it had been submitted after the deadline.
Liberty House challenged the RP’s decision taking the matter to the Principal Bench of NCLT, New Delhi. The NCLT observed the bid by Liberty House could not be disqualified only on the grounds it had been submitted after the deadline.
While Tata Steel had offered to make an upfront payment of Rs 17,000 crore to the lenders, way better than JSW Steel’s offer of an upfront payment of Rs 11,000 crore.
According to sources, Liberty House has offered to pay bankers an amount of Rs 18,500 crore upfront though this could not be confirmed.
Tata Steel’s counsel had earlier argued in the tribunal Liberty House was, with a view to gaining an unfair advantage over other bidders including TSL, submitting its bid after the other bids had been opened and material information regarding these had been reported in the press.
“The whole corporate insolvency resolution process (CIRP) would be prejudiced and derailed. It would set a bad precedent in Insolvency Bankruptcy Code (IBC) itself and it would in turn open floodgates to whimsical challenges to CIRP, thereby leading to a complete breakdown of a time-bound process,” the company’s counsel was quoted as saying in the NCLT’s April 23 order. Tata Steel also argued that any bid now entertained after full knowledge of pre-existing valid bids would reduce the process to a farce and render useless the raison d’etre of the resolution and bidding process.
However, the two-member NCLT bench, headed by Justice M M Kumar, in its order had said that the resolution plan of Liberty House shall not be rejected on the grounds it had been delayed. “The rejection shall be on some substantive ground as against flimsy one,” the bench had said. It directed the CoC to complete its resolution proceedings by June 23. Bhushan Power and Steel figured among the 12 non-performing assets referred for insolvency proceedings by Reserve Bank of India in June last year.