NCLT reserves order in Essar Steel case after hearing ArcelorMittal, Numetal
07 April 2018
The Ahmedabad bench of the National Company Law Tribunal (NCLT) has concluded hearing arguments from all the parties in the Essar Steel bankruptcy case and decided to reserve its order.
In the final round of hearings today the NCLT heard arguments from Numetal and ArcelorMittal, both of which in the race to acquire the bankrupt Essar Steel, as the two once again tried to convince the tribunal over their disqualification by the resolution professional, claiming that rules have been followed before submitting their bids.
The tribunal, comprising adjudicating authority Manorama Kumari and Harihar Prakash Chaturvedi, kept its order reserved for a future date, possibly on 12 April.
Numetal and ArcelorMittal knocked on the doors of NCLT over their disqualification in the first round of bidding claiming that rules have been followed before submitting bids.
Senior counsel Mihir Thakor, appearing for Numetal, today said his client has challenged the resolution professional's decision to disqualify it from the first round of bidding because "there was no impropriety in restructuring Numetal".
While admitting that Numetal was formed by the promoters of the Essar Steel itself "with the purpose of submitting the resolution plan to acquire Essar Steel”, Thakor said that was no bar on Numetal to bid for Essar’s assets.
RP's lawyer Darius Khambata had on Friday told the bench that Numetal's bid was rejected because Essar Steel promoter Ravi Ruia's son Rewant Ruia was, in some way or other, in control of Numetal through Aurora Trusts.
He said such an arrangement was in violation of the section 29 (A) of the Insolvency and Bankruptcy Code(IBC).
Thakor, however, said Numetal had undergone substantial structural changes as far as Rewant Ruia's role in Numetal is concerned.
"It was originally intended to be a promoter's company before the introduction of section 29(A). But then, it ceases to be a promoter's company. Thus, just because it was a promoter's company in the past, it should not be disqualified," argued Thakor.
Appearing for ArcelorMittal, senior counsel Abhishek Manu Singhvi said Numetal's demand that Mittals should first pay up the debt of Uttam Galva, an NPA firm, "is a classic case of diversion and deflection".
Singvi said while on one side Numetal questions the non-payment of debt on Uttam Galva, on the other side "Ruias themselves brought Essar Steel to its kneels by making it an NPA".
Lenders had disqualified both ArcelorMittal and Numetal, the only two bidders for the 10-million tonne capacity, debt-laden Essar Steel at Hazira in Gujarat citing technical issues, including their ownership structure.
Essar Steel owes more than Rs45,000 crore to over 30 banks.
The two companies challenged the lenders' decision at the NCLT soon after they were disqualified, following which the NCLT allowed rebid till 2 April.
ArcelorMittal along with Nippon of Japan, Anil Agarwal's Vedanta and Numetal along with JSW Steel have put in bids in the final round.