ibusinesslines.com
ibusinesslines.com September 24, 2017


Insolvency case: Gujarat HC dismisses Essar Steel petition challenging RBI

17 July 2017, 03:57 | Kelvin Horton

Gujarat High Court dismisses Essar Steel's plea against RBI; insolvency process to continue

Gujarat HC dismisses Essar Steel's plea against RBI

The Gujarat High Court on Monday disposed of the petition moved by Essar Steel challenging the insolvency proceeding against it by Reserve Bank of India without granting any relief to the company.

Essar Steel, in its petition, had appealed that the RBI notification arrived even while the firm was trying to implement a board-approved restructuring package.

Essar Steel had argued that it should have been given an opportunity to present its case before the Reserve Bank of India made a decision to include the company among 12 defaulters that would be referred to bankruptcy court.

The Gujarat High Court today refused to grant any relief to Essar Steel for the insolvency proceedings initiated against it at the Ahmedabad Bench of NCLT. It also objected to being clubbed with 11 other defaulters and said it was in discussion with banks to restructure repayments, financial daily Economic Times (ET) reported on Monday.

The steel company's debt has increased to over Rs 42,000 crore. Shares of most of the nine listed companies out of the 12 on the RBI's list are on a downtrend since then.


State Bank of India, which leads a consortium of banks under the Joint Lenders' Forum for corporate debt restructuring of Essar Steel and is a respondent in the case, has hired Shardul Amarchand Mangaldas and Co.

The action was a violation of his client's fundamental right to equality before the law and equal protection of the law under Article 14 of Constitution, he said.

RBI counsel Darius Khambata, however, said the steel firm had suppressed facts and misled the court to get a favourable decision.

"The company was aware of the SBI's action". Meanwhile, bankruptcy proceedings have also been filed on Essar Steel Ltd and Monnet Ispat and Energy Ltd. You can not play games with the court. Instantly acknowledging this error, the RBI told the Gujarat High Court that it would withdraw this line from the press release, and did so by the means of a corrigendum. Some other estimates put them at Rs 8-10 lakh crore that includes bad loans of some private banks. While arguing before the court, the RBI counsel had informed the court that these 12 NPA accounts represent 25 per cent of the total NPA of Rs. 7,50,000 crore, which forms 5 per cent of the country's GDP.



Other News

Trending Now

AS Journalist reveals Chelsea will make bid for Sergio Aguero
Premier League holders Chelsea could reportedly land the services of Sergio Aguero during this summer's transfer window. Chelsea are on the lookout for a new striker after Antonio Conte told Diego Costa he was surplus to requirements.

ETMarkets After Hours: RIL on a new high; ITC smoke clouds FMCG
NSE's Nifty closed above the 9,900 level for the first time at 9,916 with 40 components ending in the green and 11 in the red. MSCI's broadest index of Asia-Pacific shares outside Japan extended earlier gains to climb 0.26 percent by 0630 GMT.

SunPower Corporation (SPWR) Earning Somewhat Positive Press Coverage, Analysis Shows
Merriman Wealth Management LLC acquired a new stake in SunPower Corporation during the first quarter worth approximately $122,000. BidaskClub raised shares of SunPower Corporation from a "hold" rating to a "buy" rating in a research note on Tuesday, June 27th.

Agents seize 480 pounds of pot shipped from Mexico to Warren area
It's not the first time marijuana was found hidden in cars shipped from Mexico, Balzano said. The Portage County Sheriff's Drug Task Force is working with the DEA in the investigation.

The 2nd Round of the Brexit Talks Begins
At a one-day session in June both sides agreed on a broad timetable for the talks. The European Council President said it was "below expectations".

In Asia-Pacific countries, many are concerned about North Korea's nuclear program
We should have no illusions that they will solve this problem without significant changes in USA policy toward both nations. North Korea manufactures atomic bombs using uranium and plutonium and has tested five nuclear bombs .

Milan Offer Paletta And €40m For Belotti
The prolific forward was missing from Torino's kit launch ahead of the 2017-18 season, which prompted further speculation over his future.