SBI tells Gujarat HC: Essar Steel ready for NCLT proceedings

The RBI and SBI have demanded termination of the interim relief given to company

By: ENS Economic Bureau | Ahmedabad | Published:July 14, 2017 2:57 am

The State Bank of India (SBI) told the Gujarat High Court (HC) on Thursday that the top officials of Essar Steel were present in the meeting with the lenders on June 22 and the company was informed and had agreed about proceedings in the National Company Law Tribunal (NCLT).

Arguing before Justice SG Shah, the SBI counsel also said that petitioner has made false statement as it was aware about the NCLT process at a meeting on June 26 where eight top officials of Essar Steel including Essar Group CEO Prashant Ruia were present. “Essar Steel had accepted in the meeting that SBI can go to NCLT for insolvency proceedings and this has been kept away from the court. It is sufficient to dismiss the petition of the company,” the SBI counsel said. The counsel told the court that the company had made presentation in joint lenders’ forum (JLF) meeting and had agreed to participate in the insolvency proceedings with the NCLT. The company had also requested for the insolvency resolution professional (IRP) to work smoothly with Essar Steel in a “cohesive manner” with the management.

Both the RBI and SBI demanded termination of the interim relief given to the Essar Steel in the earlier order by the court. However, Essar Steel’s senior counsel Mihir Thakor raised objection to the submissions made by the respondents and sought to clarify with counter arguments. The arguments would continue on Friday.

Meanwhile, Standard Chartered Bank argued that being a foreign bank, it did not fall under the Banking Regulation Act or under the RBI’s circular. Therefore, it was not the part of the JLF. It has filed a same petition with NCLT on its own merits. In its petition, filed on July 4, Essar Steel had mentioned that it was taken by surprise by the RBI’s June 13 press release to initiate insolvency procedure under the NCLT against 12 top NPA accounts, even as the company was in the middle of the debt restructuring talks with its lenders.

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