The world's largest steelmaker takes to Twitter to make a point. Sajjan Jindal's company refutes the allegation.
Taking its rivalry with JSW Steel on to Twitter, ArcelorMittal on Wednesday tweeted that the Sajjan Jindal company's bid for Monnet Ispat is against the Insolvency and Bankruptcy Code's (IBC) Clause 29A, and is a "mockery".
On Tuesday, lenders of Monnet Ispat had approved JSW Steel's bid for the company. The Sajjan Jindal company had bid along with AION Investments.
But contending the development, ArcelorMittal (India) chose to air its views via its Twitter handle. Tagging the JSW Steel chairman and managing director, the world's largest steelmaker tweeted:
@sajjanjindal Interesting what decision is being taken on Monnet today given it’s clear JSW runs afoul of 29A as they are related to the existing promoter….who is making the mockery here?
— ArcelorMittal India (@ArcelorMittalIn) April 11, 2018
Both the companies are in the race for Essar Steel. While ArcelorMittal has partnered with Nippon Steel & Sumitomo Metal, JSW Steel is an investor in the Numetal consortium.
The Clause
Apart from preventing promoters of defaulting companies from bidding for stressed assets, Clause 29A of the IBC also debars "connected persons."
Earlier, Bhushan Steel employees (the company was also put under NCLT and JSW Steel was one of the bidders), had alleged that Sajjan Jindal's sister Seema Jajodia was a promoter in Monnet Ispat and thus making Jindal a "connected person." Seema was married to Sandeep Jajodia, promoter of Monnet Ispat.
Seema later transferred her shares in the company as a gift, and in a BSE announcement requested that she be excluded as a promoter of Monnet Ispat.
Reacting to ArcelorMittal's allegation, JSW Steel replied:
"JSW Steel has gone through the rigour of scrutiny. After the thorough examination of facts, JSW Steel is declared as qualified resolution applicant as per the provisions of sec 29(A) of Insolvency and bankruptcy code (IBC) 2016 not only in Monnet but in other stressed accounts.
"The intention of unfounded allegations may be to defame JSW Steel or probably using an insufficient or incorrect interpretation of information to mislead the general public. JSW Steel adheres to highest standards of corporate governance."
In March, Sajjan Jindal - with an indirect reference to ArcelorMittal's exit from Uttam Galva - had said that it's not fair that a promoter exits a company just to be eligible to bid for a stressed asset.
ArcelorMittal had exited Uttam Galva, and also declassified itself as a promoter of the defaulting company.
Now it was the turn of the Lakshmi Mittal-company to put the blame on JSW Steel.
"We are fed up with being pushed around and seems to be one set of rules for some and another for others," said a source close to ArcelorMittal.
Both, ArcelorMittal and Numetal had approached the Ahmedabad bench of the NCLT to reconsider their bids in the first round of bidding for Essar Steel.
The bench is expected to make a decision later in the week.
The bids in the second round of the auction can only be opened after the bench takes a call on the pleas by ArcelorMittal and Numetal.