Even as the Supreme Court hears ArcelorMittal’s appeal against the National Company Law Appellate Tribunal (NCLAT) order relating to its eligibility to bid for bankrupt Essar Steel, rival Numetal also on Wednesday moved the apex court challenging the the three-day time frame given by the appellate tribunal to ArcelorMittal to cure its bid of its infirmity.
Even as the Supreme Court hears ArcelorMittal’s appeal against the National Company Law Appellate Tribunal (NCLAT) order relating to its eligibility to bid for bankrupt Essar Steel, rival Numetal also on Wednesday moved the apex court challenging the the three-day time frame given by the appellate tribunal to ArcelorMittal to cure its bid of its infirmity. While the NCLAT had approved the eligibility of the second round of bid put in by Numetal, it said that ArcelorMittal first needed to clear dues of Rs 7,000 crore of firms it was previously associated with by September 11 to be eligible to bid.
Numetal’s petition states that there is no such provision under the Insolvency and Bankruptcy Code which allows three days’ time time to clear dues by defaulting bidders to become a qualified bidder. According to it, ArcelorMittal should have paid the dues before submitting its bids. Numetal’s appeal will be taken up for hearing on Tuesday.
On Wednesday ArcelorMittal told a bench led by justice RF Nariman that it had exited Uttam Galva — in which it held a stake and which was a defaulter company — in February itself and its revised bid was filed only after the company was divested. Hearing in the matter will resume on Thursday.
Senior lawyer Harish Salve, appearing for ArcelorMittal, said that the company is willing to pay Rs 7,000 crore dues if it emerged as the successful bidder, but it is not agreeable to pay the money as a precondition for just bidding. He said that the company was ready to pay Rs 7,000 crore, which is already lying in its escrow account, as it wanted to have its presence in India’s steel sector and also live harmoniously with the banks.
At one point, when Salve said that Numetal was not eligible to bid because the manner they divested the beneficial stake held by a Ruia family member — which would have made it invalid since Essar Steel was promoted by the Ruia family — was not proper, Nariman responded, “Why don’t you worry about yourself first.” Salve termed Numetal as a “shell company” that was set up just seven days before it bid for Essar Steel.
“I will pay and I am committed to them. I don’t want to fight with CoC (committee of creditors). I find the (Essar Steel) plant worthy. I don’t have a steel plant in India, it is worth it,” he said, adding it has also hiked its offer to Rs 42,000 crore.“Consider my bid — Rs 42,000 crore plus Rs 7,000 crore — and that makes it Rs 49,000 crore. If I am not the highest bidder, I go back. But if I am the highest bidder, then I should get it (Essar Steel),” Salve said. When senior counsel Mukul Rohatgi, on behalf of Numetal, said that the LN Mittal group was a co-promoter of Uttam Galva, Salve said, “Of course we had that the rights. We never exercised our voting rights. I never stepped into the shoes of promoters. I was never on the board.”
Salve took exception to the NCLAT order which stated that the the Mittal Group, being the promoter and in the control and management of KSS Petron, another defaulter company, has “stigma attached to it and cannot be cleared by ‘KSS Global’ by divesting its shares in ‘KSS Petron’ and the stigma will continue till the payment of all overdue amount with interest thereon and charges relating to NPA account of ‘KSS Petron’ are not cleared”.
Even Nariman said “it is upsetting and is not correct at all”. The senior counsel further argued that Numetal’s Rs 37,000-crore bid was accepted by the appellate tribunal without any riders last week. “A Russian bank wanting to take over a sick Indian company is highly unusual… The European Union (EU) had passed order against VTB Bank (part of the Numetal bidding consortium) for irregularities.”