Electrosteel Steels seeks exemption from Sebi for filing Q4, FY18 results

Electrosteel's casting plant in West Bengal

Electrosteel Steels, which undergoing insolvency resolution process, has sought exemption from the markets regulator Sebi from filing its financial results for the quarter and year ended on March 31, 2018.

In a regulatory filing, Electrosteel Steels (ESL) expressed its inability in filing mandatory disclosures due to "mismatch of liabilities of the company in its books of account and those admitted by resolution professional of the company...(i.e. from July 21, 2017 to April 17, 2018) in terms of the Insolvency and Bankruptcy Code, 2016".

On April 17, 2018, the National Company Law Tribunal (NCLT), Kolkata Bench, had approved the resolution plan submitted by Vedanta for Electrosteel Steels.

However, this was challenged by Renaissance Steel, an unsuccessful bidder before the National Company Law Appellate Tribunal (NCLAT).

The appellate tribunal had on 1 May 2018, ordered to maintain the status quo on ESL, and the company is allowed to spent amounts only to the extent of maintaining the company as a going concern company.

Electrosteel Steels further said that due to the "order to maintain the status quo of the company in light of which the impact of the approved plan... cannot be adequately disclosed and reconciled. In view of the above, the audited financial statements that may be prepared, may not give a complete/ true and fair representation of financials of the company".

Earlier this month, NCLAT admitted the petition of Renaissance Steel challenging Vedanta's bid for debt-ridden Electrosteel.

A two-member bench of the tribunal headed by Chairman Justice S J Mukhopadhaya admitted the plea and directed to list the matter on May 28.

Renaissance Steel's resolution application was rejected by the Committee of Creditors (CoC) of Electrosteel Steels. Electrosteel Steels owes lenders more than Rs 130 billion, of which about Rs 50 billion is to State Bank of India alone.

On May 1, NCLAT had directed that status quo be maintained in the case pertaining to the sale of debt ridden Electrosteel Steels to Vedanta.

Renaissance Steel has submitted before NCLAT that Vedanta is not eligible to bid for Electrosteel under section 29 A of the Insolvency & Bankruptcy Code.

It said one of Vedanta's affiliates in Zambia -- a unit of its UK-based parent Vedanta Resources Plc -- had been found guilty of criminal misconduct punishable with two or more years in jail.

Renaissance Steel also raised an objection against the CoC's decision to not allow it to participate in the meeting in which the successful bidder was decided.

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