Essar Steel case: Standard Chartered delaying insolvency process, CoC tells NCLT

Standard Chartered Bank (SCB) doesn’t have anything to argue as its loan is not secured with project assets but it is still delaying the case using arm-twisting and blackmailing tactics, the Committee of Creditors (CoC) counsel told the Ahmedabad bench of National Company Law Tribunal (NCLT) on Friday during the hearing of Essar Steel insolvency case.

Rejecting all charges made by SCB counsel, including that of conspiracy against SBC and entire process of resolution plan as a ‘big scam’, the CoC counsel said that decision on distribution plan was taken on best commercial wisdom of CoC. He further said that through negotiation core-committee could raise ArcelorMittal’s bid from Rs 35,000 crore to Rs 39,500 crore plus minimum guarantee of Rs 2,500 crore as working capital. “Don’t trivialise negotiation through imaginary conspiracy. Decisions were taken on the basis of quality, nature and depth of security,” he alleged.

Earlier on the day SCB counsel said that the heart of the resolution plan lies in distribution mechanism and suggested to increase the offer made by ArcelorMittal. He argued that the procedure was non-transparent, fraud and illegal and as SCB was not amongst the majority, its voice was not heard.

“In the case of liquidation value is Rs 15000 crore, distribution would be done as per security. Similarly, distribution of Rs 42000 crore (ArcelorMittal’s bid) should be placed accordingly,” he added. Meanwhile, in another development related to Essar Steel’s Insolvency case, GPI Textile, owned by Prmod Mittal, the younger brother of ArcelorMittal’s LN Mittal, withdrew its application with liberty to file it afresh. GPI Textile had approached NCLT Ahmedabad bench and sought quashing of ArcelorMittal’s resolution plan, claiming that it still owes his company s 300. ArcelorMittal and resolution professional of Essar Steel had opposed GPI Textile counsel’s plea, stating committee of lenders in a written submission before the NCLT Ahmedabad had said they did not object to ArcelorMittal plan.

Essar Steel