HC puts StanChart's plea on Essar Steel's insolvency proceedings on hold

A division Bench of the Gujarat High Court on Wednesday adjourned Standard Chartered Bank’s appeal for quashing a single-judge Bench’s stay on insolvency proceedings filed against Essar Steel.

The London-based lender said in its appeal, a copy of which is in possession of Business Standard, that Essar Steel had “failed to disclose” to the single- judge Bench that the bank was “neither a party to any alleged restructuring package, nor any consent has been obtained to such package”. The appeal maintained that Standard Chartered was not a member of any committee of lenders, which was being claimed to be considering Essar Steel's restructuring package.

Earlier, the single-judge bench of Justice S G Shah stayed the insolvency proceedings against Essar Steel by its lender, Standard Chartered Bank, at the National Company Law Tribunal (NCLT)'s Ahmedabad bench till the next hearing on July 7. It also directed the Reserve Bank of India (RBI) to explain what it meant by the NCLT according priority to the 12 cases of insolvency. In an oral order, the division bench adjourned the matter till July 11 even as it maintained that it did not wish to disturb the ongoing proceedings of the single-judge bench in the case, said sources. In its stay order, the single-judge bench observed that Essar Steel had repaid Rs 3,467 crore in the past one year and that the company was doing well and serious efforts were being made for its revival. However, Standard Chartered Bank claimed in its appeal that Essar Steel had paid nothing to it as part of its overall Rs 3,490 crore repayment. Read More