Less than week after sealing the deal to acquire Bhushan Steel, Tata Steel has received a notice from the National Company Law Appellate Tribunal on a case filed by Bhushan Steel promoter Neeraj Singal, who has challenged Tata Steel’s eligibility to bid under the Insolvency and Bankruptcy Code.
While Singal had sought a stay on Tata Steel’s acquisition, the NCLAT, headed by Chairman Justice SJ Mukhopadhaya, issued notices to Tata Steel, the resolution professional and Bhushan Steel’s Committee of Creditors to file their response.
“Let us decide the law but not stall the process,” the Bench said. Singal, who owns a 22 per cent stake in Bhushan Steel, claimed that no notice was given to him by the creditors while finalising the deal with Tata Steel. The sale of Bhushan Steel to Tata Steel would be subject to the final outcome of the case, the Bench added, posting the hearing in the matter for May 30 and asked the parties to file their replies within a week.
Meanwhile, Bhushan operational creditor L&T has also approached the NCLAT against NCLT for rejecting its plea to be considered a financial creditor.
Bhushan Steel owes L&T ₹900 crore. As a financial creditor, L&T can recover more and limit the haircut it has to take.
Earlier dismissing L&T’s plea, the NCLT had levied a penalty of ₹1 lakh on the company. L&T’s plea will come up for hearing at the NCLAT on May 22.
On May 18, Tata Steel had announced that it has acquired 73 per cent stake in Bhushan Steel for ₹35,200 crore. Tata Steel had said ₹1,200 crore will be paid to operational creditors of BSL over a period of 12 months.
via NCLAT issues notice to Tata Steel on eligibility of bid for Bhushan Steel – Business Line