Essar Steel: Ruias want in at CoC meetings

Our Bureau Ahmedabad | Updated on February 12, 2019 Published on February 12, 2019

Essar Steel’s financial creditors have accepted a resolution plan from ArcelorMittal   -  Bloomberg

Cite Ruchi Soya case to invoke right to comment on resolution plan

Raising fresh objections to the approval given by the Committee of Creditors (CoC) to ArcelorMittal’s resolution plan for the stressed Essar Steel India Ltd (ESIL), the latter’s promoters, the Ruias, have invoked their rights to participate in CoC meetings and veto the plan.

Arguing in front of a two-member Ahmedabad Bench of the National Company Law Tribunal (NCLT), comprising adjudicating authorities Harihar Prakash Chaturvedi and Manorama Kumari, the counsel appearing for the Ruias said that when the resolution plan offered by ArcelorMittal was finalised, the promoters had been deprived of two rights.

Denial of two rights

“One, to participate in the meeting that was called to consider the resolution plan, and second, to challenge the plan further before the appellate authority,” the counsel said. “Unless I get the resolution plan, I can’t have these two rights.”

The counsel cited the recent Supreme Court order in the Ruchi Soya case, which entitled the suspended board of the company to participate in CoC meetings and comment on the plan.

The apex court had also ruled that the resolution plans should be shared with the suspended board members of the company.

On these grounds, the counsel sought that ArcelorMittal’s resolution plan “be sent back to CoC”, and the promoters be given “a copy to make comments on it, and till then the plan should not be approved”.

The counsel further said the suspended management should be invited to the meetings so that they can “meaningfully participate” in them. The Ruias were not given ArecelorMittal’s resolution plan, and had not been able to comment on it, the counsel added.

“As per the law, members of the erstwhile board have a right to participate in the meetings of the CoC. In February 2018, the first resolution plan was submitted by two parties, ArcelorMittal and Numetal. Both were rejected. But we were not allowed to participate in the CoC meetings where the plans were rejected,” said the counsel.

Published on February 12, 2019
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