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NCLAT puts Essar Steel insolvency resolution on hold

In April, the NCLT had set aside the first round of bidding by Numetal and ArcelorMittal citing procedural lapses, but allowed both ArcelorMittal and Numetal to re-bid.

Published: 23rd May 2018 02:32 AM  |   Last Updated: 23rd May 2018 06:19 AM   |  A+A-

A man speaks on a mobile phone as he walks past an Essar logo in Mumbai. (File photo | Reuters)

By Express News Service

MUMBAI: The National Company Law Appellate Tribunal (NCLAT) on Tuesday passed an interim order directing the tribunal not to pass any order, including an order of liquidation, effectively putting Essar Steel Ltd’s insolvency resolution process on hold.

It will hear the matter from July 23.

Admitting the pleas filed by the VTB-led Numetal and ArcelorMittal India, the bench headed by Justice SJ Mukhopadhyay explicitly asked the resolution professional, the committee of creditors and the NCLT not to pass any orders even if the deadline for the resolution process expires on May 28.

In April, the NCLT had set aside the first round of bidding by Numetal and ArcelorMittal citing procedural lapses, but allowed both ArcelorMittal and Numetal to re-bid after rectifying the ineligibility criteria under Section 29A.

While ArcelorMittal was disqualified for being part of debt-defaulters Uttam Galva and KSS Petron, Numetal was disqualified for having links with Essar promoters. Subsequently, ArcelorMittal deposited Rs 7,000 crore in an escrow account to settle the dues with the rider that it emerges as the winning bidder for Essar Steel.

RCom challenges NCLT order on Ericsson

Reliance Communications Ltd (RCom) has moved the NCLAT challenging the order of NCLT allowing a plea for its insolvency filed by Swedish telecom equipment maker Ericsson. In a disclosure to bourses, RCom said it had approached NCLAT along with its two subsidiaries, Reliance Telecom and Reliance Infratel, to stay the order passed by the Mumbai bench of the NCLT on May 15. Ericsson approached NCLT to recover its money and filed an insolvency plea.

Last week, RCom said it was in advanced talks with Ericsson to resolve commercial issues, but the latter hinted that an out-of-court settlement was unlikely. Ericsson signed a seven-year deal in 2014 to operate and manage RCom’s nationwide telecoms network and is now seeking Rs 1,155 crore from the firm and two of its subsidiaries. The bankruptcy court admitted Ericsson’s plea seeking insolvency resolution against RCom over unpaid service dues, potentially derailing the company’s plan to sell assets to larger rival Reliance Jio.



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