The battle for Essar Steel at the National Company Law Tribunal (NCLT) hearing in Ahmedabad witnessed heated arguments on Wednesday, with both Numetal and ArcelorMittal contesting each other’s eligibility as the rightful bidder by deploying the country’s top lawyers.
The two companies and Essar’s Committee of Creditors (CoC) ended their arguments at 6 pm.
Maharashtra’s former Advocate General Darius Khambata, who is representing the Resolution Professional, is likely to make his arguments on Thursday when proceedings resume at 11:30 am.
Numetal began Wednesday’s hearings. Represented by Mukul Rohatgi and Janak Dwarkadas, Numetal questioned the manner of ArcelorMittal’s exit as a promoter in Uttam Galva, which has `6,000 crore in unpaid debt and is an NPA since 2016.
It asked how ArcelorMittal could be allowed to make technical corrections by selling its 29% stake for `1 and informing the BSE and NSE to declassify it as co-promoter.
Numetal also argued that section 29A of Insolvency and Bankruptcy Code (IBC) allows a defaulter to bid only after it sheds its defaulter status.
“They haven’t removed their past sin (didn’t pay the default money back); rather, they used legal paperwork as an escape route to make themselves technically correct and eligible for rebidding,” Rohatgi argued.
KSS Petron India, a private company, is 70% owned by KSS Petron Kazakhistan.
Numetal argued that it has been wrongly disqualified from bidding as the IRP made the cardinal mistake to treat Rewant Ruia as a stakeholder acting in concert with Numetal or the Ruia family, and has some bad intention. With a 25% stake in Numetal held ***indirectly*** by Aurora Trust, Rewant Ruia was just a beneficiary without having any controlling power, Rohatgi said. Just being the son of Essar Steel co-founder and promoter Ravi Ruia does not disqualify Rewant or Numetal, the counsel argued.
Abhishek Singhvi, arguing for ArcelorMittal, said the contention that Aurora Enterprises (AEL) is merely a passive investor in Numetal is also clearly a device, and a facade. Numetal, AEL and AHL were all incorporated on the same date in Mauritius for the purpose of submission of a resolution plan; the entire earnest money deposit of Rs 500 crore was funded by AEL.
Defending ArcelorMittal against Numetal’s allegation of the sale of shares in Uttam Galva and KSS Petron, Singhvi said the first bidding date was February 12, 2018, and Arcelor exited prior to that date from Uttam Galva and KSS Petron.
“…I have severed my shares at zero value as my association with you (Uttam Galva/KSS Petron) I have found to be worthless,” Singhvi said. When it happened was the crucial point here, he argued. In case of Uttam Galva, the stake was sold on 7th February, thus cutting off the “umbilical cord.” And by 22nd and 23rd March, both NSE and BSE gave ArcelorMittal the declassification certificate. “I made a bad investment so I severed my connection. But Numetal is saying that we should still remain married,” Singhvi argued.
Counsel Ravi Kadam, who along with Soli Sorabjee is representing the CoC, requested the court to allow the CoC and IRP to open the second-round bid documents before the 270-day period for Essar resolution were to end on April 29. “If the process is not ended within the time frame of 270 days, the whole purpose of IBC will be disturbed,” Kadam said.
Source: Economic Times