NCLAT orders status quo in Electrosteel insolvency case

National Company Law Appellate Tribunal (NCLAT) on Tuesday ordered status quo in the insolvency process of Electrosteel Steel India Pvt. Ltd, asking its management not to spend any money other than for day-to-day affairs.

A bench headed by S J Mukhopadhyay was hearing an appeal moved by one of the unsuccessful bidders, Renaissance Steel India Pvt. Ltd, against an April 17 order of the National Company Law Tribunal (NCLT) Kolkata bench approving Vedanta Ltd’s ₹5,320 crore resolution plan for the debtriden Electrosteel.

The NCLAT bench agreed to hear Renissance’s appeal, and issued notices to Vedanta and lenders asking them to reply in 10 days. The matter will be heard next on May 17.

Renaissance Steel has opposed the resolution plan, stating Vendanta was not eligible to bid for Electrosteel under Section 29A of the Insolvency and Bankruptcy Code. The company also said its resolution plan of ₹6,000 crore was higher than Vedanta’s.

While approving Anil Agarwal led Vedanta’s bid, NCLT Kolkata Bench had rejected the Section 29A objection raised by Renaissance Steel.

Renaissance Steel had contended that one of Vedanta’s affiliates—a unit of its UK-based parent Vedanta Resources Plc—had been found guilty of criminal misconduct punishable with two or more years in jail.

NEWDELHI:The