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ArcelorMittal to NCLAT; The company was eligible to bid for Essar Steel

Press Trust of India  |  New Delhi 

today said it was eligible under the Insolvency & Bankruptcy Code to bid for as it was not a promotor of and KKS Petron, and had already offloaded its shares before submission of the bids.

Arguing before the (NCLAT) on behalf of ArcelorMittal, submitted that its eligibility should be judged as on the date of submission of the resolution plan for

"is not a shareholder in as on February 7 and on February 9 it was not a shareholder of .. We have (ArcelorMittal) submitted bid on February 12," said Salve.

He further contended that never had any management control in

"ArcelorMittal never exercised any of the rights under the shareholders agreement, never appointed any directors to the board of Uttam Galva and never involved itself in the management and policy decisions of Uttam Galva," Salve said.

Section 29 A of IBC bars participation by promoters of delinquent companies in bidding for assets being auctioned.

Last month, had admitted the lenders insolvency plea of against Uttam Value Steel Ltd, a listed subsidiary of Ltd.

ArcelorMittal had sold its entire shareholdings in Uttam Galva and before submitting its resolution plan for

He also submitted that in the rival bidder Numetal Ltd, VTB, a Russian has 40 per cent shareholding. It is barred from trading in securities or accessing the securities market by regulators in the and USA.

"If the is gone then how would they survive," he submitted before the appellate tribunal.

On being asked by the two-member bench headed by NCLAT Justice S J Mukhopadhaya as why the company submitted Rs 7,000 crore in escrow account, Salve said that ArcelorMittal was asked to do that by NCLT, Ahmedabad.

"NCLT said if you pay then you are off the hook," he said.

ArcelorMittal had offered to settle Uttam Galva's debt and had put Rs 7,000 crore in an escrow account.

The NCLAT on May 22 ordered status quo on insolvency of Essar Steel for two months as it admitted petitions of Numetal and ArcelorMittal over the bidding eligibility.

Numetal and ArcelorMittal have filed petitions in the NCLAT challenging the disqualification of their first round of bids.

Both Numetal and ArcelorMittal put in bids in the second round after their offers in the first round were opined to be invalid. Numetal faced disqualification as its 25 per cent stake was owned by of Ruia family, the promoters of Essar Steel then while ArcelorMittal's first bid was rejected because of it holding shares in loan defaulting companies Uttam Galva Steel and

For the second round of bid, VTB sought to sever ties with the Ruia family by buying out Aurora Trusts stake in Numetal. ArcelorMittal transferred Rs 7,000 crore to an escrow account of SBI to clear outstanding loans of Uttam Galva and

In the second round of bidding, Anil Agarwal's also joined the race. Also, JSW joined Numetal for the bid.

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Tue, July 10 2018. 20:55 IST