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The order to pay 7000 crore to be eligible to bid for Essar Steel was assailed in the Supreme Court by steel and Mining Firm ArcelorMittalthe order of the NCLAT. The company has already divested its shares in the forms Uttam Galvanized Steel and KSS Petron, whose bad loans were directed to be paid by the company. This fact was thus cited. ArcelorMittal is a company promoted by the steel tycoon LN Mittal and has made a bid of Rs 42,000 crore for Essar Steel has alleged before the supreme court bench headed by Justices R F Nariman and Indu Malhotra that NuMetal was not eligible to bid for the steel company. NuMetal had also challenged the participation of ArcelorMittal in the bidding by the NCLAT.
Harish Salve appearing for ArcelorMittal said that the company had exited Uttam Galvanized in February and that it’s revised bid was submitted after it had divested from UttamGalva. ArcelorMittal also never had any directors in Uttam Galva. Salve also referred to the previous share holding pattern of NuMetal and said that it was involved in a joint venture with Arora Enterprises and Russian VTB Bank. The bench set the hearing the next day for ArcelorMittal. On being asked whether the court would pass any interim order, the bench said that the court would pass the order straightaway. Both the companies had in February made separate bids to take over Essar Steel. The Committee of Creditors had disqualified both the bids saying that both the companies' promoters were tied to companies that were loan defaulters and disqualified under the Insolvency and Bankruptcy Code.
NCLAT had held that NuMetal was not related to the promoters of Ease Steel and was hence eligible to bid. But ArcelorMittal was connected to Uttam Galva and KSS Peyton which have been classified as non performing assets.
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