Essar Steel: NCLAT seeks explanation for rejection of first round of bids

The National Company Law Appellate Tribunal (NCLAT) on Monday sought an explanation from the insolvency resolution professional of Essar Steel Ltd for rejecting the first round of bids by Numetal Ltd and ArcelorMittal India Ltd.

During the hearing of the cross petitions filed by the two disqualified bidders, a two-judge NCLAT bench headed by justice SJ Mukhopadhyay said: “We have to decide whether the decision of the resolution professional to reject the bids of the first round was good or bad. Also, whether the decision of the committee of creditors to call for a second round of bids was a good decision or not.”

Appearing for Numetal, Mukul Rohtagi argued that Arcelor Mittal could only submit a resolution plan only after “clearing the overdue amounts of Uttam Galva Steels Ltd and KSS Petron Pvt. Ltd and attach the receipts” of the transactions.

ArcelorMittal, in its petition, had challenged its disqualification on the grounds that it had exited Uttam Galva before submitting a bid for Essar Steel on February 12.

It also said that its parent, ArcelorMittal Netherlands BV, had offered to settle its debt and had transferred ₹7,000 crore in an escrow account maintained by the State Bank of India (SBI), so that it was eligible to bid for the debt-laden steel company. SBI leads a consortium of lenders to Essar Steel.

NEW DELHI: