Top Essar Steel shareholder for rejection of ArcelorMittal bid

New Delhi: An Essar Steel majority shareholder Tuesday moved NCLAT seeking rejection of ArcelorMittal's Rs 42,000 crore bid of the bankrupt company, alleging that its promoter Lakshmi Mittal hid his association with loan defaulting firms run by his brothers, that made his firm ineligible to participate in insolvency proceedings.

The plea by Essar Steel Asia Holdings Ltd (ESAHL), which holds 72 per cent shares of Essar Steel, cames weeks after an insolvency court cleared ArcelorMittal's bid for Essar Steel, which was auctioned by lenders to recover unpaid loans.

In its plea before the National Company Law Appellate Tribunal (NCLAT), ESAHL alleged that Mittal was a promoter of GPI Textiles, Balasore Alloys and Gontermann Piepers - firms run by his brothers Pramod and Vinod Mittal that had been classified as non-performing assets or bad loans by banks.

Insolvency and Bankruptcy Code (IBC) rules had previously compelled Mittal to shell out an extra Rs 7,000 crore to clear bank dues of Uttam Galva Steels and KSS Petron where he held some stake and reportedly sold his holdings in one of them for Re 1 a share.