Mumbai: ArcelorMittal India Pvt. Ltd has withdrawn its letter to the Essar Steel resolution professional (RP) wherein it had hinted that Vedanta may not be eligible to bid for the debt-laden company, given its patchy environmental and human rights record.

The first letter on 15 September, written to the court-appointed RP, Satish Kumar Gupta, ran into six pages and listed the various infractions committed by Vedanta and its sister companies.

In a tacit admission of a faux pas, the second letter, a one-pager written on 16 September, requested the RP to ignore the first. “An internal draft of such a letter was inadvertently shared with you. Please ignore the communication for now. We regret any inconvenience caused to you." Mint has reviewed both letters, which were signed by Sanjay Sharma, the chief executive officer, India and China, ArcelorMittal.

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ArcelorMittal, promoted by Indian-born L.N. Mittal, is the largest steel company in the world, and is engaged in a battle for control of Essar Steel, which owns a 10-million tonne steel plant in Gujarat. Essar Steel was admitted into bankruptcy court earlier this year as it was unable to pay its debt of 50,786 crore.

Mittal has bid 42,000 crore to buy out Essar Steel, while Vedanta’s bid was at 34,000 crore. Numetal, a consortium promoted by Russia’s VTB Bank, has also placed a bid of 37,000 crore for Essar.

Over the last few months, both ArcelorMittal and Numetal, the front runners in the three-way battle for Essar, have been attempting to disprove each other’s eligibility as qualified bidders. Last week, ArcelorMittal contested the eligibility of Numetal at the Supreme Court saying it was formed by Aurora Enterprises Ltd, where Rewant Ruia is a prominent shareholder. The Ruia family are the original promoters of Essar Steel and are disqualified from reclaiming their bankrupt company under Section 29A of the Insolvency and Bankruptcy Code.

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ArcelorMittal’s letter to the RP appears to say that the company had intended to train its guns on Vedanta, the lowest bidder in the fray, as well. In the first letter, Sharma of ArcelorMittal had said: “We believe that one of the cornerstones of the IBC process is full and complete disclosure of all material facts necessary for the committee of creditors to assess the eligibility of the resolution applicants as well as the feasibility and viability of any resolution plan submitted by such applicants."

The letter then lists environmental law violations committed in India (specifically Tuticorin and Lanjigarh), Zambia and other jurisdictions, illegal mining, disregard for safety standards and human rights violations, involving the Vedanta Group, in order to “maintain the sanctity of the IBC process, as well as in the interest of transparency".

The facts mentioned in the letter regarding Vedanta and its sister companies are public knowledge. ArcelorMittal points to the recent violence that broke out at Tuticorin, Tamil Nadu, when a copper smelter operated in the town by Sterlite, a subsidiary of Vedanta’s, was accused of damaging the local environment. The letter says that the Supreme Court has admitted a civil appeal and issued notice to Sterlite for dumping over 3.52 lakh tonnes of copper slag waste in the water-spread area of Uppar river.

The letter also refers to Konkola Copper Mines, a Zambian subsidiary of Vedanta Plc, which was convicted in 2015 under the (Zambian) Environment Protection and Pollution Control Act, 1990, for water pollution, which poisoned thousands of Chingola residents in 2006.

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It also points to Sesa Goa, another subsidiary of Vedanta Ltd, which the Supreme Court pulled up in 2014 for illegal mining in Goa. Its mining licences were suspended as are the environmental clearances granted to its mines in Goa. ArceorMittal also pointed to lax safety standards at Bharat Aluminium Co. Ltd, an aluminium plant run by Vedanta in Chhattisgarh, and investigations by the Indian National Human Rights Commission into human rights violations associated with Vedanta’s operations in Lanjigarh. ArcelorMittal also pointed out that several large foreign investors, including the Norwegian Pension Fund and the Church of England, had withdrawn their investment in Vedanta Plc citing lax ethical standards.

A representative for ArcelorMittal declined to comment on the letters. When contacted, a spokesperson for Vedanta Ltd said: “We are highly disappointed that such baseless and irrelevant issues are being raised and unfounded allegations are being made with the objective to malign competitors. Similar condemnable 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 10 August 2018 declared Vedanta Ltd an eligible applicant under Section 29A of the IBC."

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