Essar Steel suppressed facts: SBI to Gujarat High Court on insolvency case

Terming Essar Steel’s petition against the insolvency proceedings “futile”, lead lender State Bank of India’s counsel told the Gujarat High Court on Thursday that the borrower company was aware and had agreed to the proceedings in the June 22 joint lenders’ forum (JLF) meeting.

Both the Reserve Bank of India and SBI counsels on Thursday argued that Essar Steel had suppressed facts that it was taken by surprise by the RBI’s June 13 press release amid debt restructuring talks with banks. 

“Essar Steel had accepted in the meeting that SBI can go to National Company Law Tribunal (NCLT) for insolvency proceedings, and this has been kept from the court and is sufficient to show Essar Steel the door and dismiss its petition,” the SBI counsel argued.

The RBI and SBI counsels also sought discontinuance of the interim relief offered to Essar Steel to which the latter responded with counter arguments, which will continue till July 14. The hearing for admission of insolvency proceedings against Essar Steel has been deferred to early next week by the NCLT.

In his arguments, the SBI counsel narrated a set of chronological events from June 15 when the SBI wrote to Essar Steel on convening a JLF meeting on June 22 till the latter’s subsequent letters to its lender. It added that eight high ranking officials of Essar Steel, including Essar Group Chief Executive Officer Prashant Ruia, were present at the June 22 meeting. 

The SBI counsel told the court that after the meeting, Essar Steel wrote to SBI and accepted in its presentation made to the JLF that it would “participate in insolvency proceedings with the NCLT” and had requested for an insolvency resolution professional to work “seamlessly with Essar Steel in a cohesive manner”.