Essar Steel ex-directors move NCLAT against tribunal order

ArcelorMittal may have to wait to take control of Essar Steel as three former directors of the erstwhile board of the bankrupt steel firm have moved the National Company Law Appellate Tribunal (NCLAT) against the order of the Ahmedabad bench of National Company Law Tribunal (NCLT). The Ahmedabad bench of the NCLT, last week, allowed takeover of Essar Steel by ArcelorMittal. “The matter was mentioned before a two-member bench headed by Chairman Justice S.J. Mukhopadhaya, which asked it to be listed after the Ahmedabad bench of the NCLT posts its full written order,” said a source in the know of the development. The former directors — PrashantRuia, DilipOommen and Rajiv Bhatnagar — will appeal against the order rejecting the application by Essar promoters to accept their resolution plan, said the source. Standard Chartered Bank also approached the appellate tribunal against the NCLT order which approved the lenders’ plan to let ArcelorMittal take over Essar Steel. Passing its order, the Ahmedabad bench had suggested that the payment of Rs. 42,000 crore by ArcelorMittal be distributed among financial and operational creditors in the ratio of 85:15. This translates into a haircut of about 14% for the lenders as the financial creditors had claimed more than Rs. 49,000 crore. ArcelorMittal has partnered with Nippon Steel & Sumitomo Metal Corporation (NSSMC) for the purchase, though it will hold a controlling stake.