Lakshmi Mittal helps younger brother Pramod to settle STC dues2 min read . Updated: 27 Mar 2019, 06:41 PM IST
- Pramod Kumar Mittal thanked his elder for clearing a due worth ₹2,210 crore
- Mittal brothers had split the business in 1994
New Delhi: Steel magnate Lakshmi N Mittal has helped his cash-strapped younger brother Pramod clear dues he owed to State Trading Corporation, helping avoid legal troubles.
This is the second instance in as many weeks of wealthy siblings bailing out their brothers from a crisis. Last week, richest Indian Mukesh Ambani helped younger brother Anil avoid a jail term by paying of dues he owed to Swedish telecom equipment supplier Ericsson.
Pramod Kumar Mittal, 57, owner of Global Steel Holdings, thanked his elder brother's generosity in helping him clear a significant portion of ₹2,210 crore dues.
"I am very grateful to my brother Lakshmi Mittal for helping settle the liabilities to State Trading Corporation of India. This generosity ensured compliance with the order from the Supreme Court," he told PTI.
Mittal brothers had split the business in 1994 with elder brother going on to head the world's largest steel manufacturing company ArcelorMittal.
Pramod Mittal's firms Global Steel Holdings Ltd (GSHI) and Global Steel Philippines Inc had defaulted on payments to STC, following which the state-owned company filed various cases against them.
The two firms in a statement last Wednesday said they have settled ₹2,210 crore dues to STC.
Following this, the government-owned trading firm said it would not pursue any more winding up proceedings against Global Steel Holdings Ltd.
Sources said ArcelorMittal Chairman and Chief Executive Officer L N Mittal has extended ₹1,600 crore financial help to Pramod Mittal, which rescued him from various criminal and other proceedings.
"The support he (LN Mittal) has shown to the family at a time of need is a testimony to his strong values," Pramod said.
However, a spokesperson for ArcelorMittal said: "There is no comment from Mr L N Mittal".
Government-owned STC is a premier international trading company engaged primarily in exports, and imports operations.
The Enforcement Directorate had earlier initiated various criminal proceedings against Pramod Mittal, GSHL, Global Steel Philippines Inc and Balasore Alloys, and the Central Bureau of Investigation had filed an FIR in the case.
GSHL and GSPI in a statement said that they had a long-standing and successful business relationship with the State Trading Corporation of India Limited (STC) since September 2003.
Due to an unprecedented meltdown in the steel industry and depression in the world economy during 2008-2010, GSPI suffered huge losses, and consequently, a substantial amount became due and payable by GSPI to STC, it has said.
"Pursuant to conciliation proceedings between GSHL, GSPI and STC, a sum of ₹1,605 crore, inclusive of principal and interest at a rate of 13.5 per cent per annum on USD benchmark rates, was awarded to STC and was to be paid by GSHL/GSPI as principal debtors and Pramod Mittal as a guarantor.
"STC had filed and/or caused to be filed diverse proceedings against GSHL, GSPI, Pramod Mittal and others in order to recover such sum," the statement had said.
It added that Pramod Mittal has paid and /or caused to be paid an aggregate sum of ₹2,210 crore to STC, inclusive of the aforesaid ₹1,605 crore as well as post-award interest, in full and final settlement of STC's claim and now no amount is due and payable to STC and all the proceedings have been settled.
Last week, Anil Ambani's heavily debt-laden Reliance Communications had made a ₹550 crore payment, including interest, to Ericsson just a day before the expiry of the deadline set by the Supreme Court to clear dues or face a three-month jail term.
This story has been published from a wire agency feed without modifications to the text. Only the headline has been changed.