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Political sanctions have no place under insolvency code, says NuMetal
NuMetal argued in the Supreme Court on Tuesday that international “political sanctions” against Russia’s VTB Bank had no place in the Essar Steel auction under the Insolvency and Bankruptcy Code (IBC).
“In foreign policy, friends become foes and foes become friends… this is a measure of foreign policy of a particular group of countries called the EU (European Union). Russia is frowned upon by a comity of nations,” senior advocate Mukul Rohatgi, for VTB-backed NuMetal, submitted before a Bench of Justices Rohinton Nariman and Indu Malhotra. Mr. Rohatgi was referring to the EU restrictions on Russian entities for destabilising the Ukraine. He said the issue would not constitute a disqualification under Section 29A of the IBC. The IBC bars a person or anyone acting in concert from submitting a resolution plan if he is prohibited from trading by SEBI or similar restrictions abroad. Justice Nariman, however, insisted that NuMetal prove that ArcelorMittal employed “subterfuge” by divesting its shares in two debt-ridden subsidiaries — Uttam Galva Steels Ltd. and KSS Petron — just before bidding for Essar Steel. The day-long hearing saw Mr. Rohatgi argue there was no “taint” associated with Rewant Ruia, son of Essar Steel’s Ravi Ruia.
NuMetal’s first bid for Essar Steel was found ineligible as the firm was 25% owned by Rewant Ruia. Mr. Ruia, however, left the firm before the second round bid was submitted in March. The Supreme Court will continue to hear the final arguments on Wednesday. The appeal was filed by ArcelorMittal against a National Company Law Appellate Tribunal decision allowing NuMetal to place a second-round bid worth Rs. 37,000 crore for Essar Steel.
Source : https://www.thehindu.com/todays-paper/tp-business/curbs-on-vtb-no-bar-to-essar-bid/article24981656.ece
