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Renaissance Steel asks NCLAT to declare Tata Steel bid for Electrosteel ineligible

Steel News - Published on Mon, 21 May 2018

Image Source: livemint.com
Renaissance Steel Pvt Ltd, one of the unsuccessful resolution applicant for Electrosteel Steel Ltd, moved the National Company Law Appellate Tribunal seeking a declaration that Tata Steel Ltd, another unsuccessful resolution applicant, was ineligible to participate in the resolution process for the debt ridden steel manufacturer under Section 29A of the Insolvency and Bankruptcy Code.

Renaissance Steel contends that one of the UK subsidiaries of Tata Steel had flouted the UK Health and Safety at Work Act, pursuant to which fines were imposed on it. Hence, it is ineligible under the IBC.

An NCLAT bench headed by Justice S.J. Mukhopadhyay issued notice to the resolution professional for Electrosteel and Tata Steel asking them to file their replies within seven days.

The counsel for Tata Steel submitted that such a declaration would be “infructuous” and “academic” as Tata Steel is not the highest bidder for the debt ridden steel manufacturer.

On 17 May, NCLAT had admitted Renaissance Steel’s appeal against the 17 April order of the National Company Law Tribunal Kolkata bench approving Vedanta Ltd’s INR 5,320 crore resolution plan for the debt riden Electrosteel.

Renaissance Steel had contended that Vedanta was ineligible to bid under Section 29A of IBC as one of Vedanta’s affiliates in Zambia a unit of its UK-based parent Vedanta Resources Plc had been found guilty of criminal misconduct punishable with two or more years in jail. The appeal would be heard along with the main appeal on 28 May.

Earlier this month, NCLT’s principal bench had approved Tata Steel’s resolution plan for Bhushan Steel Ltd, rejecting objections with respect to its ineligibility. An appeal against this approval would be heard by NCLAT on 21 May.

Source :

Posted By : Rabi Wangkhem on Mon, 21 May 2018
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