ArcelorMittal Lambastes Vedanta In Letter...Then Withdraws It
ArcelorMittal, which is locked in a three-way bidding war for the acquisition of Essar Steel, wrote a letter targeting rival bidder Vedanta Ltd. over its alleged violation of environmental law and human rights but shortly thereafter withdrew it.
The U.K. steelmaker wrote a hard-hitting letter about “facts” related to alleged “environmental law violations committed in India and Zambia, illegal mining, disregard for safety standards and human rights violations” by Vedanta on September 15. The letter was addressed to the Resolution Professional, which is conducting the auction of Essar Steel to recover over Rs 49,000 crore of unpaid loans of banks.
But ArcelorMittal later withdrew the letter saying that an internal draft of the letter was shared accidentally. “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. A company spokesperson declined to comment when reached out for a response on the Sept. 15 letter. Later a withdrawal letter, bearing Sept. 16 as the date, came to light.
A Vedanta spokesperson strongly reacted to the first letter saying they were “highly disappointed that such baseless and irrelevant issues are being raised and unfounded allegations are being made with the objective to malign competitors”.
Similar attempts were made at the time of our bid for Electrosteel Steels Ltd as well and the same were dealt with by NCLT and NCLAT appropriately by dismissing the challenges of competing resolution applicants. NCLAT in its order dated August 10, 2018, declared Vedanta Limited as an eligible applicant under Section 29A of the IBCVedanta Spokesperson
Vedanta had won the bid to acquire Electrosteel with an offer of Rs 5,320 crore.
The National Company Law Appellate Tribunal had on Sept. 7 held Numetal’s Rs 37,000 crore second-round bid for Essar Steel was valid, but rival bidder ArcelorMittal would have to clear Rs 7,000 crore overdue loans of its previously associated firms to qualify for the acquisition.
ArcelorMittal subsequently revised its bid to Rs 42,000 crore and challenged the NCLAT order before the Supreme Court asking it to clear the dues of Uttam Galva and KSS Petron. The court is likely to further hear the appeal on Tuesday.