Calcutta: A new clause inserted in the fresh round of bidding for Essar Steel appears to have closed the door for the founding promoter Ruia family to claw back to the company in the future.

Bidders have been asked to give a declaration that neither the bidders individually or anyone controlled by them will transfer or assign any shareholding of Essar Steel to the existing promoter group prior or after the submission of the resolution plan or any time thereafter.

During the first bid, the Numetal consortium, led by Russia's VTB Capital, had 25 per cent stake of Aurora Enterprise, a Mauritius-based trust whose beneficiary was Rewant Ruia, son of Essar's founder promoter Ravi Ruia. However, Aurora's shareholding will be distributed among existing consortium partners for the fresh round of bid which will close on Monday.

The move was necessitated because Numetal was declared ineligible in the first bid because of Rewant Ruia's presence in the consortium.

Promoters of the defaulting companies are not allowed to participate in the corporate insolvency resolution process without paying the overdue amount to the creditors.

The insertion of this clause can potentially block the return of Rewant Ruia in Numetal or any other member of the Ruia family to the consortium.

The clause states:

• The resolution applicant(s) hereby unconditionally agree and undertake that [I/we] will not enter into or undertake or become party to and [I/we] shall ensure that no person controlled by [us/me] enters into or undertakes or becomes party to any arrangement (whether written or verbal, contractual or otherwise) with any member of the existing promoter group or any restricted person (defined below) relating to:

(a) transfer or assignment or causing the transfer or assignment or acquisition of any shareholding of ESIL whether directly or indirectly (whether prior to or after submission of the Resolution Plan or any time thereafter); or

(b) transfer (or causing the transfer or acquisition) of control over ESIL whether directly or indirectly (whether prior to or after submission of the resolution plan or any time thereafter.

Any breach of the terms of the new clause shall render the resolution plan submitted by the resolution applicant ineligible.

NCLT application

The latest tweak makes Numetal's application before the National Company Law Tribunal all the more important.

The company had moved the Ahmedabad bench a day before its initial bid was rejected by the committee of creditors. The CoC had also rejected the offer of ArcelorMittal India Pvt Ltd on the grounds that it was a promoter of Uttam Galva, a defaulting company.

Numetal has subsequently filed a few more applications at the bench, including one seeking to prevent opening the fresh bid before the issue of eligibility is decided.

ArcelorMittal has also gone to the same bench, seeking to "protect its rights" in relation to the first bid claiming itself to be eligible as well.

It now appears that the best chance for the Ruia family to have a toehold in Essar Steel will be if Numetal's initial avatar is found eligible.