Companies

Ruias once again urge NCLAT to scrap ArcelorMittal’s bid for Essar Steel

Our Bureau Mumbai | Updated on May 07, 2019 Published on May 07, 2019

ArcelorMittal promoter Lakshmi Mittal   -  Bloomberg

Cite promoter Lakshmi Mittal’s ties with his brothers’ debt-laden companies

The Ruia family has once again urged the National Company Law Appellate Tribunal (NCLT) to reject the winning bid of ArcelorMittal for Essar Steel.

The fresh application, filed via Essar Steel Asia Holdings (ESAH), a majority shareholder of Essar Steel, has sought to scrap the ArcelorMittal bid on the grounds that its promoter Lakshmi Mittal has ‘suppressed vital facts’ related to connections with his brothers Pramod Mittal and Vinod Mittal, and their defaulted companies.

In a petition filed before the NCLAT on Tuesday, ESAH said Mittal and ArcelorMittal India had “conspired to suppress vital facts” to make others believe that they ceased to have any business association with the former’s brothers and their companies.

ESAH had earlier offered to repay the entire debt of ₹54,389 crore defaulted by Essar Steel, but this was rejected by the Committee of Creditors (CoC).

Citing a sworn affidavit filed on behalf of Mittal and ArcelorMittal, ESAH said they had misled the Supreme Court, the NCLAT and the CoC. The affidavit had claimed that Mittal and his company had no shareholding in any of the firms promoted by his brothers, including GPI Textiles, Balasore Alloys and Gontermann Piepers, it said.

In its petition, ESAH enclosed various documents showing that as of September 2018, Mittal was a co-promoter of Navoday Consultants along with his brothers Pramod and Vinod. Navoday was in turn the promoter of GPI Textiles, Balasore Alloys and Gontermann Piepers.

Related party

The bank loans extended to Gontermann and GPI have been classified as NPAs. Due to the association of Mittal with these companies, ESAH said, ArcelorMittal would be a related party to these companies, thus ineligible to bid under the provisions of the Insolvency and Bankruptcy Code (IBC). In order to hide the fact, Mittal sold his shareholding in Navoday between October and December and disassociated himself as its co-promoter, said ESAH.

Rejects claim

ArcelorMittal called the ESAH plea the latest in a long line of frivolous attempts by the defaulting promoters of Essar Steel to distract from the fact that the lenders have declared it the credible owner of Essar Steel.

ArcelorMittal has stated that there is no business connection between Mittal and his brothers.

Allegations regarding its ineligibility on account of companies associated with Mittal’s brothers were even earlier raised by the promoters of Essar Steel before the Supreme Court, which refused to even entertain such assertions, said ArcelorMittal in a statement.

Published on May 07, 2019
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