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Steel giant ArcelorMittal said on Tuesday that its offer for the debt-laden Essar Steel was the most compelling one, and asserted that there was no connection between the company’s eligibility to bid for Essar and the businesses of LN Mittal’s brothers.
The company’s statement came a day after Russia’s VTB Group-backed Numetal upped the ante against rival bidder ArcelorMittal, alleging that loan defaults by firms owned by Mittal’s brothers disqualify him under the law.
‘Distraction’
Numetal and LN Mittal-owned ArcelorMittal are locked in a fierce takeover battle of Essar Steel Ltd (ESL) and the two are in the Supreme Court over bidding qualification. “There is absolutely no connection between ArcelorMittal’s eligibility and the businesses of Mittal’s brothers. It is, in fact, a tiresome and trivial attempt to distract from the central fact that ArcelorMittal is the most credible owner of ESL and that we have the most compelling offer on the table for all stakeholders, particularly financial creditors,” said a spokesperson for ArcelorMittal.
As previously acknowledged by the resolution professional (RP), this has no relevance to the eligibility or ability of ArcelorMittal to participate in the resolution process for ESL, the spokesperson added.
ESL owes over ₹49,000 crore to its financial creditors, according to the RP. SBI has the highest exposure among the creditors involved in the case. In a letter to the RP for ESL, Numetal has raised the issue of alleged loan defaults by Gontermann-Peipers, Ispat Profiles India, Chhattisgarh Energy, Balasore Alloys and GPI Textiles. These firms are associated with Pramod Mittal and Vinod Mittal — LN Mittal’s brothers.
In the letter, reviewed by PTI, Numetal has asked if Gontermann was a non-performing account for more than a year at the time when insolvency proceedings against ESL began in August last year, and if LN Mittal was either a promoter, director or shareholder of the company.
Ispat Profiles, it alleged, had unserviced debt in excess of ₹2,000 crore.
Similar questions were raised regarding Chhattisgarh Energy, Balasore Alloys and GPI Textiles. “We request you to confirm whether (these) facts have been verified by you to determine the eligibility of ArcelorMittal India as a Resolution Applicant under Section 29A of the Insolvency and Bankruptcy Code (IBC),” Numetal wrote.
The IBC bars promoters of delinquent firms from bidding for stressed assets.
Numetal further stated that Pramod is alleged to have caused over-₹2,000-crore loss to State-owned State Trading Corporation, and is facing cheating and fraud charges.“Please verify if disqualification of ArcelorMittal on account of the same has been verified,” Numetal said.
It also alleged that Vinod had been disqualified to act as a director under the Companies Act, 2013. “As a result, his brother LN Mittal, promoter of ArcelorMittal, is disqualified under Section 29A(e) read with 29A(j). Please confirm if this fact has been disclosed by ArcelorMittal,” Numetal said in the letter.
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