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The Ahmedabad Bench of National Company Law Tribunal (NCLT) on Monday heard petitions filed by the Essar Steel’s Committee of Creditors (CoC), Resolution Professional (RP) and ArcelorMittal on the maintainability of the application filed by the company’s shareholders.
The two-member bench, comprising Justice Harihar Prakash Chaturvedi and Justice Manorama Kumari, placed the further hearing on December 13.
During the arguments on Monday, the CoC raised objections citing non-maintainability of the application filed by Essar Steel Asia Holdings Limited (ESAHL) — a 72-per cent shareholder in Essar Steel. The shareholders have submitted a proposal for settlement of the entire debt for an amount of approximately ₹54,389 crore.
Represented by senior counsel Ravi Kadam, CoC rejected the ESAHL’s argument by giving a chronology of events starting from May 2017, when Essar Steel India Ltd (ESIL) placed its debt restructuring plan, which was followed by the Reserve Bank of India (RBI)’s press release in June 2017 seeking to initiate insolvency proceedings under the NCLT against 12 top NPA accounts.
Kadam further informed the tribunal that the financial creditors are losing a potential interest to the tune of ₹17 crore a day because of the delay in resolution process.
During the subsequent events, ESAHL was a joint holding company in ESIL. CoC objected to sudden emergence of ESAHL with an offer to settle whole debt, at a time, when the CoC had already approved a resolution plan submitted by LN Mittal-led ArcelorMittal.
ArcelorMittal proposal offers ₹42,000 crore, under which financial creditors will get ₹41,987 crore out of the total dues of over ₹49,400 crore. The operational creditors (OCs), however, will get only ₹214 crore against total outstanding of ₹4,976 crore.
Senior counsel Abhishek Manu Singhvi, appearing for ArcelorMittal came down heavily on ESAHL for its ‘strategic silence’ even when the corporate debtor was undergoing an insolvency proceeding.
“They silently kept watching the corporate debtor drown without extending a helping hand. This is a strategic silence and it should be punished,” he told the court.
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