Mumbai: The Mumbai bench of the National Company Law Tribunal (NCLT) on Tuesday admitted an insolvency petition filed by State Bank of India (SBI) against Uttam Value Steel Ltd, a listed subsidiary of Uttam Galva Steels Ltd.
Presiding officer M.K. Shrawat also approved Rajiv Chakraborty as interim resolution professional (IRP). The tribunal will rule on the bankruptcy plea against another subsidiary Uttam Galva Metallics on 11 July. Uttam Value Steel and Uttam Galva Metallics owe banks Rs3,200 crore and Rs2,200 crore, respectively. SBI had approached the dedicated bankruptcy court after Uttam Value Steel had defaulted on Rs334 crore. Presiding officer Shrawat said the bench had noted that banks were not recalling loans after declaring them as non-performing. “We will ask the resolution professional (RP) about what has transpired in such accounts," he said in the oral order.
Meghna Rajadhyaksha, partner of law firm Shardul Amarchand Mangaldas representing SBI informed the tribunal that after the declaring NPA, there wasn’t any enhancement of loans.
The development comes a day after the National Company Law Appellate Tribunal (NCLAT) refused to direct the NCLT to defer its order on the two companies.
A person close to the development said that the firm intends to exhaust all the remedies including challenging the order in higher courts.
Earlier, the subsidiaries of debt-laden Uttam Galva Steels had argued that Ziraat Ban, the second-largest state-owned bank of Turkey, had written to SBI that one of their high-net worth clients were interested in acquiring their assets.
Earlier, on 6 June, another bench of NCLT had adjourned the insolvency plea of Uttam Galva Steel to 16 July, following requests from the company as well as its lenders.
The NCLAT is set to hear a petition on the insolvency resolution of Essar Steel Ltd. ArcelorMittal India Pvt Ltd—which is vying for Essar Steel and which once owned shares in loan defaulter Uttam Galva—has deposited Rs7,000 crore in an escrow account to qualify for the bidding. If NCLAT declares ArcelorMittal eligible, the money in the escrow account will go towards settling Uttam Galva’s debt.