VTB Bank-led Numetal and global steel major ArcelorMittal fought bitterly in the Supreme Court on Tuesday over their bids for Essar Steel, accusing each other of being ineligible to make an offer under the bankruptcy law while trying to support their own credentials.
Numetal, ArcelorMittal and Vedanta had bid for Essar Steel, one of the biggest debt resolution cases being handled under the Insolvency and Bankruptcy Code. ArcelorMittal contested Numetal’s eligibility in the top court, claiming that its backers included Rewant Ruia, a scion of the family that controlled Essar Steel.
The bankruptcy code prevents promoters of stressed companies to bid for other such assets unless they cleared the arrears. Ruia had left the consortium, which Numetal said made it eligible. It opposed ArcelorMittal’s claim to bid, citing chairman Lakshmi Mittal’s links to two defaulters — Uttam GalvaNSE 0.90 % and KSS Petron.
During its arguments in the top court, Numetal said ArcelorMittal should have paid Rs 7,000 crore of Uttam Galva and KSS Petron’s loans before it bid for Essar Steel.
Mittal had dropped his name as a promoter of the companies. But Numetal’s counsel, senior advocate Mukul Rohatgi, accused ArcelorMittal of avoiding paying the bad loans of the two erstwhile entities run by its promoters.
ArcelorMittal exited the companies shortly before bidding for Essar Steel to become eligible under the law, Rohatgi told a two-judge bench comprising Justices RF Nariman and Indu Malhotra.
The National Company Law Appellate Tribunal had given ArcelorMittal three days to pay the Rs 7,000 crore dues of Uttam Galva and KSS Petron to banks to be eligible for the bid.
ArcelorMittal, which offered Rs 42,000 crore for Essar Steel, promised in the top court that it would pay the dues if it was allowed to go ahead with the bid.
Numetal, however, said the top court could only examine eligibility and not resolution plans.