Uttam Galva’s minority shareholders file petition against ArcelorMittal’s declassification bid

ArcelorMittal’s move to sell off its stake in Uttam GalvaBSE -4.38 % before bidding for Essar SteelBSE 0.41 % met with opposition from an unlikely quarter on Wednesday. Minority shareholders of Uttam Galva filed a petition against the company’s board, markets watchdog SEBI and the stock exchanges at the Securities and Appellate Tribunal (SAT) for reclassifying ArcelorMittal Netherlands BV as a public shareholder in the company.

Minority shareholders have alleged breach of listing and disclosure norms and sought a stay on the approval. This follows after the National Stock Exchange and BSE allowed reclassification of promoter status as per Uttam Galva’s request. The SAT, however, did not issue a stay order on the promoter declassification and the matter was listed for hearing on April 23.

ArcelorMittal had approached the stock exchanges in the first week of March for declassification. Reacting to the development, ArcelorMittal said in a statement: “This is another obvious action to delay and complicate the process to find a new owner for Essar Steel India. Quite clearly ArcelorMittal is not a promoter of Uttam Galva. We never considered ourselves a promoter as we had no management involvement or board representation and furthermore sold our shareholding.

It is only natural therefore, that we should be declassified on the stock exchanges which has been done following the relevant processes. We note the latest attempt to delay the process has not succeeded with bids to be submitted on April 2. ArcelorMittal plans to submit a bid as part of the revised offer process although we continue to believe our original offer is eligible.

In the statement, ArcelorMittal also added: “Our track record and long experience in the steel industry makes us a highly credible bidder for Essar Steel India, able to add value to the growth and development of the Indian steel industry.”