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A day after ArcelorMittal said JSW runs afoul of Section 29A, on account of related party links in the Monnet Ispat deal, Seshagiri Rao, joint managing director and group chief financial officer, JSW Steel, tells Ishita Ayan Dutt that his company has been declared an eligible resolution applicant by a third party while ArcelorMittal was found ineligible for Essar Steel. The “related party link” in question is Seema Jajodia, Sajjan Jindal's sister and an erstwhile promoter of Monnet Ispat & Energy, who sold her shares and declassified as a promoter of the company. Edited excerpts:
How would you respond to ArcelorMittal’s comments on related party links?
Whatever is now being circulated is already known. So after going through the facts, JSW Steel has been declared as an eligible resolution applicant. But at the same time, the person who is making allegations, has been disqualified by the same third parties, the resolution professional (RP). So he needs to defend himself as to why he is ineligible than pointing fingers at others’ eligibility. He had submitted an application in Essar Steel and we submitted in Monnet and Bhushan. And RPs have declared us as a qualified resolution applicant. So, there is a clear distinction.
Does this war of words between ArcelorMittal and JSW have to do with Essar?
The question of declassification and sale of shares was first raised by JSW?
It does not have to do with anything specific. Jindal had raised a point but he is above these controversies, in my view. Even before the Indian Bankrupcty Code (IBC) amendment, he had been talking about defaulting promoters, particularly dubious, and that they should not be allowed to participate.
In the case of Uttam Galva, he was directly holding shares, they were co-promoter. Whereas the case being referred to, even though the RP has decided in our favour, we do not hold any shares. We do not have anything in the company. Through a connected party, an allegation is being made, on which the RP has already given his view. So, we have become a successful resolution applicant notwithstanding those facts.
What would you say about the allegations made by Bhushan Steel employees on the related party issue that are before the National Company Law Tribunal (NCLT)?
These are baseless. A third party who is having complete legal help, the resolution professional, who is empowered under law, after having gone through the process, has said, we are an eligible resolution applicant. And somebody has gone to court and argued on this. The court judgment is reserved. We will know the court’s view once it comes. As far as things stand today, the RP’s order is final.
You mean, the RP’s order is final with regard to Monnet?
Whether Monnet or Bhushan, we are an eligible resolution applicant. In case of Bhushan Steel, a third party has gone to court against JSW Steel and Tata Steel and they have agitated in the court, the verdict is reserved. But today's position as far as the RP is concerned is that we are an eligible resolution applicant. But ArcelorMittal is not an eligible resolution applicant with regard to Essar Steel.
The main allegation is that the transfer of shares by Seema Jajodia was antedated. What would you say to that?
Whether the fact is right or wrong, I do not want to go into those details. Based on all these facts, the RP has decided I am an eligible resolution applicant. If somebody is agitating in court, it is in court. So far, there is no judgment.
Have you got the letter of intent (LoI) for Monnet?
We have received the LoI and the consortium has accepted the terms. The closure of the transaction will be subject to obtaining the necessary regulatory approvals from the NCLT and the Competition Commission of India.