Rewant Ruia is one of the ultimate beneficiaries and owners of a shareholder of Numetal — one of Essar Steel’s bidders — through various holding companies and trusts, Essar Steel’s resolution professional Satish Kumar Gupta has told the Ahmedabad Bench of the National Company Law Tribunal (NCLT). According to the NCLT’s order, in a case filed by Numetal and ArcelorMittal challenging their ineligibility to bid for Essar Steel, the RP has informed the court that Numetal “is nothing but a newly-incorporated joint venture between Aurora Enterprises, Crinium Bay, Indo International Ltd and Tyazhpromexport through which its shareholders have the resolution plan”.
“The applicant has not submitted any agreement or understanding among parties to substantiate the averment that AEL/Rewant Ruia has no management rights, special rights, or the ability to participate in the management of the applicant either currently or going forward,” Gupta said. He added that the applicant (Numetal) was incorporated on October 13, 2017, for the purposes of submission of the resolution plan. According to him, at the time of incorporation of the company, its entire shareholding was held by Aurora Enterprises Ltd (AEL), which was in turn held entirely by Aurora Holdings Ltd, which was in turn held entirely by Rewant Ruia (through a trust and another holding company).
Further, on October 18, 2017, AEL transferred 26.1% of its shareholding in the applicant to Essar Communications (ECL) and on October 20, 2017, Numetal submitted its expression of interest (seven days after its incorporation) pursuant to the advertisement.
“I understand that ECL transferred its entire shareholding in the applicant to one Crinium Bay Holdings Ltd, which is an indirect wholly owned subsidiary of VTB Bank, and AEL transferred its 13.9% shareholding to Crinium Bay, 25.1% shareholding to
Indo International Ltd and 9.9% to Tyazhpromexport,” Gupta said.
According to the RP, on the date of submission of the Numetal Resolution plan, (Feb 12, 2018), the shareholding of the applicant was: 40% held by Crinium Bay, 25.1% held by Indo International Ltd, 9.9% by Tyazhpromexport and 25% by AEL. Numetal, he explained, by itself does not meet the financial eligibility criteria and is relying on its shareholders’ strength for satisfying the requirements of the process documents. At the stage of submission of EoI, he added, it met the tangible net worth requirement prescribed under the advertisement by relying on the net worth of ECL and for purposes of the Numetal Resolution Plan, it satisfies the minimum tangible net worth criteria on account of Crinium Bay.
He added that Ravi Ruia, father of Rewant Ruia, was the promoter of the Essar Steel, which was classified as a non-performing asset (NPA) more than one year prior to commencement of the corporate insolvency resolution process (CIRP) on August 2, 2017. “In the light of the fact that Rewant Ruia (who is acting jointly with the other shareholders of the applicant for the purposes of submission of the Resolution Plan and is deemed to be acting in concert with Ravi Ruia) is ineligible under Section 29A of the Code,” he said.
Earlier this week, the Ahmedabad bench of the NCLT had asked the committee of creditors (CoC) to reconsider the bids of ArcelorMittal and Numetal for Essar Steel made in the first round. The two competing bidders had also participated in the second round with Numetal teaming up with JSW Steel.