The promotors of Essar Steel have opposed ArcelorMittal’s bid to purchase the troubled metals maker by bringing to the appellate tribunal’s notice that the Luxembourg-based firm’s shareholder Lakshmi Mittal had “suppressed vital facts” regarding his business association with loan-defaulting companies run by his brothers.
The petitioners cited an October 17, 2018 affidavit on behalf of Mittal that said the steel tycoon hasn’t had any business dealings with his two siblings for the last 20 years. At the same time, they also pointed out documents that revealed Mittal was a co-promoter of non-performing assets (NPAs) along with his brothers in Gontermann Piepers, GPI Textiles and Balasore Alloys as late as September 30, 2018.
Against this background, the Essar Steel promoters sought the rejection of Arcelor’s proposal for Essar Steel as bankruptcy rules bar promoters of defaulting companies from bidding for stressed assets. The National Company Law Appellate Tribunal (NCLAT) subsequently asked Arcelor to respond to the complaint.
The petitioners said that Mittal had sold his shares in Navoday Consultants (which in turn held a stake in the three NPAs) between October 1, 2018 and December 12, 2018 and stopped showing himself as a promoter of Navoday, thus hiding the fact. Reacting to the development, Arcelor said, “This is the latest in a long line of frivolous attempts by the defaulting promoters of Essar Steel to distract from the central fact that Indian lenders have declared Arcelor as the most credible owner of Essar Steel.” Arcelor has stated on numerous occasions that there is absolutely no business connection between Mittal and his brothers, the statement added. “The latest allegations of Essar Steel promoters are yet another attempt to subvert the directions of the Supreme Court and the bankruptcy code and critical government legislation. Their assertions are irrelevant, misleading and will be rebutted in the strongest possible terms.”