NuMetal ineligible to bid for Essar Steel: ArcelorMittal to SC
New Delhi: Steel and mining firm ArcelorMittal today told the Supreme Court 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 Essar Steel and alleged that Arora Enterprises Ltd (AEL), whose majority shares were with Rewant Ruia, had created Numetal.
NuMetal, a consortium of Russia's VTB-JSW, has also filed an appeal challenging the National Company Law Appellate Tribunal (NCLAT) order allowing ArcelorMittal to take part in the bid and alleged that the firm stood disqualified due non-deposition of the money.
The NCLAT had asked ArcelorMittal to clear the stigma of defaulter by clearing the dues of Uttam Galva Steel and KSS Petron in which it had shares.
It 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 7,000 crore dues of the two firms it was previously associated with.
Continuing his arguments today, senior advocate Harish Salve, 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 50,000 crore.
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 Essar Steel.
"The earnest money of Rs 500 crore was deposited by AEL. 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, alleging that NuMetal was "a shell company of Ruias".
"The whole argument has been that Rewant Ruia is currently not related to the firm 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 50,000 crore to clear bank dues.
At this, the bench asked "your point is Ruias are circling back to get the company (Essar Steel)."