Fight for Essar Steel: ArcelorMittal writes against Vedanta, withdraws later

ArcelorMittal, which is locked in a three-way fight for the acquisition of bankrupt Essar Steel, first wrote a letter to resolution professional Satish Kumar Gupta targeting rival bidder Vedanta over its alleged violation of environmental law and human rights but shortly withdrew it.

ArcelorMittal, which is competing against Russia’s VTB Group-backed Numetal and Vedanta for the takeover of Essar Steel, on September 15 wrote to Essar Steel’s RP a hard-hitting letter relating to Vedanta’s alleged environmental law violations in India and Zambia, illegal mining, disregard for safety standards and human rights violations.

However, a day after, ArcelorMittal withdrew the letter saying, “an internal draft of such letter was inadvertently shared”. “Please ignore the communication for now. We regret any inconvenience caused to you”. The letter went on to state that the company reserves all rights in relation to the issue. An ArcelorMittal spokesperson declined to comment on the matter.

As is known, similar allegations were levelled against Vedanta by Renaissance Steel regarding its eligibility to bid for Electrosteel but the National Company Law Appellate Tribunal had dismissed such charges last month and the company acquired the bankrupt Electrosteel.

In the six-page letter issued on September 15, ArcelorMittal had written to the RP saying the cornerstone of the Insolvency and Bankruptcy Code – under which Essar Steel is being auctioned to recover unpaid loans – is full and complete disclosure of all material facts and so it is inviting attention to certain facts in respect of Vedanta.

Essar Steel