Essar Steel Insolvency: ArcelorMittal, Numetal allowed to bid in second round, NCLT to hear plea on April 4

NCLT's Ahmedabad bench on Tuesday adjourned the hearing on petitions filed by ArcelorMittal and Numetal challenging the disqualifications of their bids for debt-laden Essar Steel to April 4. The bench has asked both the parties to file their replies by April 2, before the next hearing.
 
Lakshmi Mittal-promoted ArcelorMittal India and Numetal Mauritius, a joint venture between Russia's VTB Bank and Rewant Ruia, were disqualified during the first round of the bidding process on the grounds that their bids flouted the norms under the Insolvency and Bankruptcy Code.
 
Section 29 of the IBC says that any bidder with a direct or indirect connection with the current promoters is not an eligible applicant. It also considers those who have been part of a company that has become a non-performing asset as ineligible.
 
Rewant, the son of Essar Steel co-promoter Ravi Ruia, was considered a related party under Section 29A of the IBC and, therefore, was not allowed to bid. In the case of ArcelorMittal, its disqualification stemmed from the fact that it had a substantial minority stake of 29 per cent in debt-laden Uttam Galva, which is also facing insolvency proceedings.
 
The bench, headed by Manorama Kumari, the adjudicating authority of the Ahmedabad Bench, ordered that the second round of bidding for Essar Steel would continue as scheduled on April 2.
 
The Committee of Creditors (CoC) in the Essar Steel case, represented by Darius Khambatta, said that ArcelorMittal and Numetal can table fresh bids on April 2, along with other interested parties. "They can rebid on April 2. Nothing can stop them," Khambatta told the Bench on Tuesday as per news reports.

Numetal's legal counsel Mukul Rohatgi had challenged the earlier disqualification, and had asked the Bench to defer the second round of bidding.   

Senior Congress leader and ArcelorMittal's counsel Abhishek Manu Singhvi, too, had asked for a deferment in the bidding process.

CoC counsel Khambatta argued that as per the 270-day insolvency resolution timeline, the process should end on April 29. Therefore, the bids should be over at the earliest.