The National Company Law Appellate Tribunal (NCLAT) on Friday dismissed a petition questioning the eligibility of Tata Steel and Vedanta to acquire the stressed assets of Bhushan Steel and Electrosteel in an insolvency driven process.
The promoter of Bhushan Steel, Neeraj Singhal, had questioned Tata Steel’s eligibility under Section 29A of the Insolvency and Bankruptcy Code (IBC) as the latter’s UK subsidiary was penalised under the British law for violation of the UK Health and Safety at Work Act. Meanwhile, Renaissance Steel challenged billionaire Anil Agarwal-promoted Vedanta’s eligibility to acquire Electrosteel as it was punished in Zambia for environment violation. Section 29A of IBC mandates that a person convicted for any offence punishable with imprisonment for two years or more is ineligible for submitting a resolution plan. It applies even if such a conviction has been made under foreign laws.
Pronouncing its verdict on both the cases together, the NCLAT said the offences of both Vedanta Resources-owned Konkola Copper Mines and Tata Steel UK were found to be less severe than those deemed ineligible under the insolvency code; both the bidders were found to be eligible to submit resolution plans in the respective insolvency resolution cases of Electrosteel and Bhushan Steel.
The NCLAT declined to interfere with the approval of the resolution plan by the National Company Law Tribunal, Kolkata, said Vedanta in a statement on Friday.
The NCLAT said the offences of Vedanta Resources-owned Konkola Mines and Tata Steel UK were not too severe under IBC
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