The counsel for Essar Steel’s resolution professional on Thursday defended the disqualification of Numetal and ArcelorMittal in the first round of bids for the stressed asset, at the Ahmedabad Bench of the National Company Law Tribunal (NCLT).
Essar Steel’s resolution professional is Satish Kumar Gupta of Alvarez & Marsal. He is being represented by former advocate general of Maharashtra, Darius Khambatta.
Khambatta told the two adjudicating member Bench, Harihar Prakash Chaturvedi and Manorama Kumari, that both Numetal and ArcelorMittal were rightly disqualified in the first round of bids held on February 12.
The two bidders have defended their eligibility and also filed applications challenging each other’s bids. Numetal has also prayed that opening the second round of bids be deferred till issues over the first were resolved.
Khambatta told the Bench on Thursday that Russia’s VTB Bank-backed Numetal was contradicting itself. “Numetal says the resolution professional should not look at other shareholding constituents behind it. But, Numetal’s application itself is on the basis of its constituents. It does not rely on its own capabilities,” Khambatta told the tribunal, adding that while the company had challenged its disqualification in the first round, it had also gone ahead and restructured itself to qualify for the second round.
Justifying ArcelorMittal’s disqualification, Khambatta said as of the deadline for the first round of bids (February 12), the bidder was still the promoter of another defaulter, Uttam Galva. The stock exchange’s approval of the stake sale came later in March. The legal counsel for Essar’s committee of creditors (CoC), Soli Cooper, said his clients had the “absolute right” to approve or reject any resolution plans of bidders.
Mukul Rahotgi, representing Numetal, said, quoting from the CoC’s minutes, that both it and the resolution professional were lenient on ArcelorMittal. The matter was put off for Friday, with ArcelorMittal seeking time to respond to the allegations by Rohatgi.
The tribunal did not make any pronouncement on opening of the second round of bids. In that round, apart from ArcelorMittal and Numetal, Vedanta is in the fray. Also, JSW is partnering Numetal.