A plea of the Ruia family that challenged the eligibility of ArcelorMittal’s Rs 42,000 crore bid for Essar Steel had been rejected by the NCLAT (The National Company Law Appellate Tribunal) on July 4.
The NCLAT also reviewed the accepted cases of operational creditors to Rs 19,700 crore, up from Rs 5,000 crore, saying that there was a huge difference in the claims and the data presented to the NCLAT. The total claims of financial, operational creditors now stand at Rs 69,192 crore.
The NCLAT also directed that the committee of creditors (CoC) does not have the ability to choose on the distribution of the bid amount as the responsibility lies with the insolvency resolution professional.
It ruled that no differentiation can be made between financial and operational creditors, and they have to be treated likewise.
Essar Steel spokesperson said “It appears that new facts regarding ineligibility under Section 29A, which emerged only after the previous judgment of the Supreme Court, have not been given due consideration. We are awaiting the detailed order and will decide our course of action thereafter.”
Section 29A blocks promoters of bankrupt companies from bidding. Essar Steel Asia Holdings had earlier in May, raked up LN Mittal’s association with his brothers’ bankrupt companies. It had filed a petition with the National Company Law Tribunal (NCLT) on May 7.
The NCLAT, on May 22, had held its judgment over many petitions upon ArcelorMittal’s Rs 42,000 crore bid for Essar Steel and the way the funds were being shared among the creditors of the debt-ridden company.Share this to your,