ArcelorMittal Nippon Steel India Limited Vs Securities and Exchange Board of India (Securities Appellate Tribunal, Mumbai)
Summary: The Securities Appellate Tribunal, Mumbai allowed the appeal of ArcelorMittal Nippon Steel India Limited and quashed the Adjudicating Officer’s order dated March 28, 2022 imposing a penalty of Rs. 2 lakhs for alleged non-disclosures under the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The allegations related to Essar Steel India Limited, subsequently known as ArcelorMittal Nippon Steel India Limited, and concerned non-convertible debt securities issued and listed in 2011 and alleged disclosure defaults during December 2015 to March 2019. Essar Steel India Limited was admitted to the corporate insolvency resolution process under the Insolvency and Bankruptcy Code, 2016 on August 02, 2017.
The resolution plan submitted by ArcelorMittal Nippon Steel India Limited was accepted by the Committee of Creditors and approved in the insolvency proceedings, and the Supreme Court subsequently upheld the resolution plan while recognising that the successful resolution applicant must receive the corporate debtor on a clean slate without additional claims arising after approval. SAT noted that its earlier decisions in Monnet Ispat & Energy Limited vs. SEBI, Alok Industries Ltd. vs. SEBI and Raj Oil Mills Limited vs. SEBI covered the controversy. The Adjudicating Officer had also acknowledged that those decisions squarely covered the issue but nevertheless decided the matter on merits and imposed the penalty, while directing that recovery should await disposal of SEBI’s appeals before the Supreme Court.
