INSUBCONTINENT EXCLUSIVE:
Arora Enterprises Ltd had created NuMetal, alleges ArcelorMittal.NEW DELHI: Steel and mining firm ArcelorMittal told the Supreme Court on
Thursday that its rival bidder NuMetal was not eligible to bid for Essar Steel on several grounds, including that it was a "shell company"
created by a firm in which Essar group promoters had majority shares
ArcelorMittal India (AMI), the steel tycoon L N Mittal-promoted group which has made a bid of Rs 42,000 crore for Essar Steel, raised
various objections before a bench of Justices R F Nariman and Indu Malhotra regarding the eligibility of NuMetal to bid for the debt-ridden
consortium of Russia's VTB-JSW, has also filed an appeal challenging the National Company Law Appellate Tribunal (NCLAT) order allowing
had ruled that NuMetal's second bid for Essar Steel was eligible but the same by ArcelorMittal will qualify only if it cleared the Rs
appearing for ArcelorMittal, referred to the Insolvency and Bankruptcy Code and alleged that Rewant Ruia, a relative of the Essar Promoters,
had exited from NuMetal to circumvent the eligibility criteria to bid for Essar Steel, against whom bad loans had swelled to the tune of Rs
He said that AEL, which had created NuMetal, and in which Rewant Ruia had majority shares, paid Rs 500 crore as earnest money to bid for
Ruia puts in money and now says that he has no relation with it, as he is now out see the generosity of this gentleman," Salve said,
which has applied to bid for Essar Steel," he said, adding ArcelorMittal was willing to pay Rs 7,000 crore if Essar group agreed to pay Rs
you (AMI) disqualified, is the threshold question," it said, adding "as per your argument, the issue of payment of Rs 7,000 crore does go to
the root of AMI's eligibility to bid.""Yes," Salve said, adding "ineligibility is not an open and shut case".He said there was a
co-promotion agreement between ArcelorMittal and the promoters of Uttam Galva Steel and the former had divested its 29 per cent share and
ArcelorMittal had invested in Uttam Galva in 2009 under the co-promotion agreement and there was no management control
"I invested in a listed Indian company
There was no a single director (of ArcelorMittal) on the board of Uttam Galva I purchased and sold back the shares and still the stigma
it did not give any bank guarantees, it had invested, but that did not render it ineligible, he said, adding no eligiblity can be fastened
on the firm because of its investment in KSS Petron.On the ineligibilty of NuMetal, he said there was "lack of transparency" and even
adverse observations against VTB Bank of Russia which is the part of the bidding firm
The Russian firm has been investigated into by the US Justice Department and restrained from raising capital from security markets at
order of the NCLAT asking it to pay Rs 7,000 crore to become eligible to bid for Essar Steel, saying it had already divested its shares in
Creditors had, however, disqualified both the bids saying their promoters were tied to companies which were bank loan defaulters and hence
put in a bid of Rs 37,000 crore, while Vedanta Ltd entered the fray as a third bidder
bids.(Except for the headline, this story has not been edited by TheIndianSubcontinent staff and is published from a syndicated feed.)
