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The minority shareholders of debt-ridden Uttam Galva Steels have moved the Securities Appellate Tribunal in Mumbai on Wednesday against classification of ArcelorMittal as non-promoter after the company sold its entire shareholding to make it eligible to bid for stressed Essar Steel asset.
A group of minority shareholders of Uttam Galva Steels led by Sulbha Sanjay Naik has filed a case against the NSE and the BSE for declassifying ArcelorMittal as non-promoter without informal guidelines from the market regulator SEBI.
The petitioner has claimed that the NSE has approved the ArcelorMittal declassification on March 21, while the BSE did the same on March 23.
It was necessitated as Lakshmi Mittal-promoted ArcelorMittal sold its 29 per cent stake in Uttam Galva back to another promoter company as the Insolvency and Bankruptcy Code bars defaulted promoters from bidding for other stressed assets.
“... the two exchanges have approved (declassification of ArcelorMittal as non-promoter) in violation of Regulation 31A (5) and 31A (3) of the listing regulations and without waiting for informal guidance sought from SEBI. Pending disposal of the appeal, impugned decisions of the stock exchanges must be stayed forthwith,” said the petition.
Seeking time to respond and claiming no violation, the counsel for exchanges said “... the stock exchanges are not obliged to approve the reclassification of promoter shareholders only after receiving informal guidelines from SEBI”.
Presiding officer Justice JP Devadhar has given two weeks for the exchanges to file its response and from then one week for the appellants to file rejoinder. SAT will hear the case on April 23.
Arcelor to rebid
Responding to the case filed in SAT, ArcelorMittal in a statement said this is another obvious action to delay and complicate the process to find a new owner for Essar Steel.
“...ArcelorMittal never considered itself as promoter of Uttam Galva as it had no management involvement or board representation. Moreover, we sold our shares. Naturally, we should be declassified on the stock exchanges...,” he said.
"The latest attempt to delay the (insolvency) process will not succeed... ArcelorMittal plans to submit a bid as part of the revised offer (by April 2) although we continue to believe our original offer is eligible, it said”
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