Jindals on the offensive
Calcutta: The Jindals have slammed the suggestion that Seema Jajodia transferred her shares in Monnet Ispat & Energy "ante dated" to enable her brother's JSW Steel to be in the clear under section 29A of the Insolvency & Bankruptcy Code, 2016 that bars defaulting promoters and their related parties to bid for distressed assets without repaying overdue loans.
"Absolutely false," said Seshagiri Rao, group CFO of $11-billion JSW Group, adding the facts were out in the open for long and ArcelorMittal's comment was "completely out of place".
"One company has been found to be eligible by the third party and the other is not. There is a fundamental difference between the two," Rao told The Telegraph.
The resolution professional for Essar Steel had disqualified ArcelorMittal in the first round of bidding, while JSW Steel had been declared a "successful resolution applicant" despite the position of Seema Jajodia in Monnet.
Rao, who said he was "surprised" at ArcelorMittal's dig on Wednesday, sought to make a further distinction.
"ArcelorMittal was a shareholder and promoter of Uttam Galva, while JSW was never a shareholder of Monnet or Monnet of JSW," he said.
ArcelorMittal sold its shares in Uttam Galva to the other promoter, the Miglani family, on February 7 before putting in its bid for Essar five days later. However, the resolution professional for Essar disqualified the Mittals on the grounds that it was not declassified as a promoter of Uttam Galva when the bid was submitted. Bourses effected the change only on March 21.
Seema Jajodia, who was also listed as the promoter of Monnet Ispat, transferred her shares by way of gift on October 24 but the company intimated the bourses only on January 27. Bids for Monnet were closed on December 12. It could not be immediately ascertained when Jajodia was declassified as the promoter of Monnet by the bourses. A petition filed by the employees of Bhushan Steel, where JSW Steel was a resolution applicant, had claimed that the transfer of shares by Jajodia in Monnet was "ante dated".
A source in ArcelorMittal, however, tried to draw a parallel to the situation. "If JSW is eligible, then ArcelorMittal must be as well," the source said, arguing that the same scale must be used in both the cases. A twitter post by ArcelorMittal had hit out at Sajjan Jindal on Wednesday, in response to Jindal's reference to Mittal's share sale in Uttam Galva prior to Essar re-bid.
"Any attempt to declassify any promoter on some technical ground to make oneself eligible to bid is nothing but circumventing the system. Qualifying such promoters as non-defaulting is nothing but a mockery of the IBC," Jindal had said on March 26.