Global Steel says Pramod Mittal is not avoiding the Indian govt2 min read . Updated: 05 Apr 2008, 12:41 AM IST
Global Steel says Pramod Mittal is not avoiding the Indian govt
Pramod Mittal, chairman of Global Steel Holdings Ltd, whose operations in Bulgaria and Nigeria have run into trouble, is not avoiding the Indian government and had visited India several times in recent months, said company officials.
The company, based in Isle of Man, has meanwhile started arbitration proceedings before the International Chamber of Commerce following cancellation of its concessions to run a steel mill and an iron ore company in Nigeria, they said.
Reacting to a Mint story on non-payment of salaries by the company, Ashok Agarwal, Global Steel’s London-based director, wrote saying “Mr Mittal is a frequent traveler to India and in last one month he traveled to India many times for business and even attended public functions."
Based on letters exchanged between government and embassy officials, the story reported they have not been able to contact Mittal, who has been living in the UK for the past five years.
This week, the Nigerian government cancelled Global Steel’s contract to run Ajaokuta Steel Co. Ltd and National Iron Ore Mining Co. Ltd, accusing its subsidiary company Global Infrastructure Holdings Ltd of “asset stripping" and pledging its assets against a $192 million (Rs768 crore) bank loan borrowal.
The company denied any wrongdoing, but many of its 480-odd Indian employees have not been paid for more than seven months, most of them returning home without full settlement.
The situation is similar at Global Steel’s second 1 million tonne plant, Delta Steel, which it acquired in southern Nigeria, and at the Kremikovtzi plant in Bulgaria, which is running short of working capital.
Bidders, including Pramod Mittal’s brother Lakshmi Mittal, have shown interest in taking management control of the mill in the east European nation.
In a statement released on Friday evening, Global Steel said it had not taken a loan pledging the assets of the Nigerian companies.
In India, Askari H. Zaidi, vice-president of corporate communications at Ispat Industries Ltd, said the Indian government could have easily approached Mittal if it was willing. “The impression that Mittal is absconding is not acceptable," he said. Mittal is also chairman of Ispat Industries, one of the group companies based in India.
Vinod Mittal, Pramod Mittal’s brother and managing director of Ispat Industries, sits on the supervisory board of Kremikovtzi AD. On Thursday, he met the overseas Indian affairs minister, Vayalar Ravi, to assure him the problem would be sorted out soon.
“I told him (Vinod Mittal) to pay salaries immediately. After paying the salary, I asked him to inform me that it has been paid," Ravi said. The minister’s office confirmed that several calls were made to London and Mumbai since end of last year in an attempt to contact Pramod Mittal.
When asked why his office has not been able to contact Mittal during his visits to India, including when he came to attend a reception to mark the wedding of aviation minister Praful Patel’s daughter, Ravi said: “That’s his personal matter who he meets. I give instructions to my staff to connect me to people and they have not been able to. My concerns are that the workers are paid."
The minister had said last week that if employees lodge formal complaints, he will take legal action against Pramod Mittal.
Mittal visited India at least four times in the past two months, said Zaidi.
Held in Udaipur in February, the wedding attracted a wide gathering of politicians, Bollywood stars and businessman, including Lakshmi Mittal.
Both Lakshmi Mittal and Pramod Mittal had hosted a pre-wedding party for the young couple in Mumbai.