Companies

ArcelorMittal throws muck at Vedanta, then takes it back

Suresh P Iyengar Mumbai | Updated on September 17, 2018 Published on September 17, 2018

Lakshmi Mittal, Chairman, ArcelorMittal   -  Reuters

Amid tussle for control of Essar Steel, LN Mittal firm accuses Vedanta of green violations

After accusing Vedanta of being ineligible to bid for Essar Steel’s stressed assets, ArcelorMittal has told the resolution professional (RP) looking into the sale of the steel company, that a letter accusing the Anil Agarwal firm of several violations was sent ‘inadvertently’.

ArcelorMittal, in a letter drafted on September 15, had asked the RP not to consider the bid placed by Vedanta as its group companies had been penalised for various violations. However, on September 16, ArcelorMittal wrote to the RP, withdrawing the complaint, saying that the earlier letter was meant to be an ‘internal draft’.

“An internal draft of such letter (accusing Vedanta) was inadvertently shared with you. Please ignore the communication for now... Note that we hereby reserve all our rights in relations to the matters reference therein (sic),” ArcelorMittal wrote, recalling its earlier letter.

Sterlite case

The initial communication by the LN Mittal-owned ArcelorMittal, sent on Saturday, had listed out various cases against Vedanta. It pointed out a 2010 ruling of the Madras High Court directing Sterlite (which is now a Vedanta company) to close down its plant at Thoothukudi for various environmental violations.

On further appeal, the Supreme Court allowed the company to operate its plant by paying a compensation of ₹100 crore for violating laws damaging the environment. In May 2018, the Tamil Nadu government had ordered the permanent closure of the plant over pollution concerns.

The first ArcelorMittal letter said the Supreme Court had admitted a civil appeal and issued notice to Sterlite for dumping over 3.52 lakh tonnes of copper slag in the water-spread area of the Uppar river in Tamil Nadu.

In 2011, the Orissa High Court termed Vedanta’s plans to expand the capacity of the Lanjigarh Alumina refinery and increase power generation as illegal since it had begun the project without the requisite clearances.

The letter said many foreign investors such as the Norwegian Pension Fund, the Church of England, the Rowntree Trust, the Marlborough Ethical Fund and the Millfield House Foundation had barred investments in Vedanta Plc due to the environmental damage and human rights violations caused by its subsidiaries Sterlite Copper, Balco, Lanjigarh Alumina, and Konkola Copper Mines.

In September 2011, the Goa government had cancelled the environmental clearance granted to Sesa Goa, a subsidiary of Vedanta, for the Pirna iron ore mine, on the ground of suppression of information in its environment impact assessment study, it said. In 2010, Konkola Copper Mines, a subsidiary of Vedanta Plc, was convicted for environment violations and water pollution under the laws of Zambia.

Reacting to the allegations by ArcelorMittal, a Vedanta spokesperson said: “We are highly disappointed that such baseless and irrelevant issues are being raised and unfounded allegations are being made with the objective to malign competitors.”

Corporate battles

Similar attempts were made at the time of Vedanta’s bid for Electrosteel Steels. However, an order issued by the National Company Law Appellate Tribunal had declared Vedanta as an eligible applicant under Section 29A of the IBC.

Currently, three companies — ArcelorMittal, Russian VTB Bank-promoted Numetal and Vedanta — are fighting it out in the Supreme Court to take over Essar Steel.

Published on September 17, 2018
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