Uttam Galva minority shareholders accuse ArcelorMittal of indulging in illegalities

ArcelorMittal has been accused by the minority shareholders of Uttam Galva of indulging in "illegalities" in connivance with banks that caused losses of Rs 6,000 crore to the banking system of the country, a charge denied by the world's largest steel maker.

The minority shareholders of Uttam Galva have flagged concerns over declassification of ArcelorMittal as promoters of Uttam Galva.

The development comes just a day before the second round of bidding for debt-laden Essar Steel, which ArcelorMittal had bid for in the first round on February 12.

The second company to submit resolution plan was Numetal.

Earlier, the SBI-led consortium of creditors had rejected both the bids submitted finding them ineligible under the IBC (Insolvency Bankruptcy Code) laws that debar related parties from bidding.

ArcelorMittal rejected the allegations as "trivial attempts" designed to distract it from bidding process for Essar Steel, claiming it is the most credible entity to takeover control of the debt-laden firm.

The shareholders said, "We would like to bring to your attention to illegalities which are being committed by ArcelorMittal possibly together with Banks and Stock Exchanges which has led to a loss of Rs 6,000 crore of public money belonging to the Indian banking system and also caused grievous harm to the interests of thousands of small shareholders of Uttam Galva Steels Ltd, a listed company."
They said that on March 1, the "National Stock Exchange responded to our letter, enclosing a letter from the Company which showed that the Company had sought informal guidance from SEBI in regard to whether shareholder approval is required for declassification."
"In a curiously hasty decision, National Stock Exchange approved the declassification on 21st March 2018 and issued a letter in this regard to the Company. It is noteworthy that in a number of other cases, such applications are lying pending with the stock exchange for months' altogether. "