Chief insolvency and companies court Judge Briggs ruled that there was “a material irregularity” at the virtual meeting of creditors on October 26, 2020 convened to consider Pramod’s IVA proposal and that debts claimed by four of the creditors listed in his IVA “have not been substantiated”.
Moorgate Industries UK (Moorgate), one of Mittal’s creditors, who had voted against the IVA, had brought the challenge to IVA in the High Court, seeking its revocationon the basis of material irregularity or that the creditors acted in bad faith. Despite Moorgate voting against, the IVA was approved by 75% of
the value of creditors at the meeting.
Briggs ruled it was unnecessary to deal with the bad faith part since the application succeeded on the basis of material irregularities.
Moorgate’s case was that four of the creditors named in the IVA should not have been allowed to vote at all. Moorgate specifically challenged the votes of Direct Investments (DIL), the biggest creditor on the IVA, to whom Mittal said he owed over 1 billion pounds (Rs 10,000 crore), Pankaj Agarwal, as assignee of Ispat Steel Holdings, to whom Mittal said he owed £561 million (Rs 5,632 crore), Rupam Poddar as assignee of Interworld Steel Industries, to whom Mittal said he owed £13. 8 million (Rs 138 crore) and Smijithlal Sathyanandan as assignee of Global Coke & Energy FZE to whomMittal said he owed £57. 7 million (Rs 579 crore).
The judge agreed that these four creditors had no right to vote. “Mr Poddar is not entitled to vote as assignee of the purported Interworld debt. Mr Agarwal is not an assignee of Ispat and cannot vote, nor is Mr Satyanandan entitled to vote having failed to come to court to make out his claim. In my judgment Pramod Mittal is an associate of DIL,” Briggs said in his judgment and he ruled that the largest alleged creditor DIL “is not a creditor. ”
Mittal, 66, an Indian citizen, who lives in Mayfair, London, owes Moorgate 139 million pounds (Rs 1,395 crore) plus interest for guaranteeing the liabilities of a company in Bosnia and Herzegovina. Mittal was declared bankrupt by the London high court on 19 June 2020 following a bankruptcy petition brought by Moorgate after Mittal failed to clear the debt.