Essar Steel bid: Russia's Numetal raises loan defaults by firms of Lakshmi Mittal's brothers

New Delhi: Russia's VTB Group-backed Numetal Ltd Monday upped the ante against rival bidder ArcelorMittal, raising alleged loan defaults by firms owned by brothers of its promoter Lakshmi N Mittal, an act it said disqualifies him under the law.

Numetal and ArcelorMittal are locked in fierce takeover battle of Essar Steel and two are in the Supreme Court over bidding qualification.

Numetal in a letter to the Resolution Professional conducting auction of Essar Steel to recover over Rs 49,000 crore of unpaid bank loans, and State Bank of India Monday raised loan defaults by Gontermann Peipers, Ispat Profiles India Ltd Chhatisgarh Energy Ltd, Balasore Alloys Ltd and GPI Textiles Ltd - firms associated with Pramod Mittal and Vinod Mittal -- brothers of L N Mittal.

In the letter, reviewed by PTI, Numetal asked if Gontermann Peipers was a non-performing account for more than a year at the tie of commencement of insolvency of Essar Steel in August last year and if L N Mittal was either a promoter, director or shareholder of the company.

Representational image. Reuters

Representational image. Reuters

Ispat Profiles, it asked, had unserviced debt in excess of Rs 2,000 crore and if L N Mittal was either a promoter, director or shareholder of the company. Similar questions were raised on Chhatisgarh Energy, Balasore Alloys and GPI Textiles Ltd.

"Please confirm if these facts have been disclosed by ArcelorMittal and if the same has been disclosed - in what manner has the same been taken into consideration by the Committee of (Essar Steel) Creditors," it wrote. "We request you to confirm whether (these) facts have been verified by you to determine the eligibility of ArcelorMittal India Pvt Ltd as a Resolution Applicant under Section 29A of the Insolvency and Bankruptcy Code."

The IBC bars promoters of delinquent firms from bidding for stressed assets.

The company further stated that Pramod Mittal is alleged to have caused over Rs 2000 crore loss to state-owned State Trading Corp (STC) and is facing cheating and fraud charges.

"Please verify if disqualification of ArcelorMittal on account of the same has been verified," it wrote.

Numetal said Vinod Mittal has been disqualified to act as a director under Companies Act 2013. "As a result, his brother LN Mittal, promoter of ArcelorMittal is disqualified under Section 29A(e) read with 29A(j). Please confirm if this fact has been disclosed by ArcelorMittal and if the same has been disclosed - in what manner has the same been taken into consideration by CoC."


Updated Date: Sep 18, 2018 11:14 AM

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