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NCLAT Upholds Electrosteel Steels Sale To Vedanta

Press Trust of India  |  New Delhi 

The today upheld the sale of Ltd to Ltd, saying the baron Anil Agarwal-led firm was eligible to bid for the debt-laden firm.

It rejected the contention of Renaissance Steel, a rival bidder for Electrosteel, that was ineligible to bid under as one of connected group firm - in Zambia, had been found guilty of violating certain environmental laws, punishable with two or more years of imprisonment.

In its order, the appellate tribunal said that although Resources PLC was convicted for the offence punishable under Section 91(1) of Act, which has provision for a fine or imprisonment for a term not exceeding three years or both, no directors was convicted for it.

"We hold that PLC, who is a connected person of Vedanta Limited is not covered by clause (d) of Section 29A of the I&B Code," said a NCLAT bench headed by Justice S Mukhopadhaya.

It further said, "In view of the aforesaid findings, we hold that Vedanta Limited' is eligible and clause (d) of Section 29A of the I&B Code' is not attracted in its case.

Section 29 A of the IBC mandates that a person convicted for any offence punishable with imprisonment for two years or more is ineligible for submitting a resolution plan.

According to NCLAT, it is to be seen whether connected person', if an individual (natural person) has been punished or not.

"But no such allegation has been made that any of the of PLC' was convicted for the offence punishable with imprisonment of two years or more, the appellate tribunal observed.

is a subsidiary of Vedanta Resources PLC' which holds 50.13 per cent equity in the company.

Vedanta Resource PLC' has another subsidiary, KCM', which has operations in Zambia's Copper belt and Central Provinces. Vedanta Resource PLC' holds equity of 79.4 per cent in

KCM' has been held guilty with regard to four offences relating to pollution on November, 2010 by the Subordinate Court of First Class for the District Holden at. Chingola, for which three counts fine has been imposed.

On May 30 this year NCLAT had allowed to make an upfront payment of Rs 5,320 crore to lenders for acquisition of

However, it had said that this payment would be subject to the outcome of the petition filed by Renaissance Steel challenging Vedanta's bid.

The bench had said that if Renaissance Steel wins the case, then the (CoC) will have to return the money to Vedanta.

owes lenders more than Rs 13,000 crore, of which about Rs 5,000 crore is to alone.

On May 17, NCLAT had admitted the petition of Renaissance Steel challenging Vedanta's bid for debt-ridden Electrosteel.

Renaissance Steel's resolution application was rejected by the CoC of

In April, the Kolkata bench of Law Tribunal (NCLT) had cleared Vedanta's Rs 5,320-crore resolution plan for Electrosteel, rejecting objections by Renaissance Steel.

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

First Published: Fri, August 10 2018. 18:10 IST