Lakshmi Mittal Helps Brother Pramod Pay Dues To State Trading Corporation
Lakshmi Niwas Mittal helped his cash-strapped younger brother Pramod Kumar Mittal clear dues he owed the State Trading Corporation of India Ltd., 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 Ambani avoid a jail term by paying of dues he owed to Swedish telecom equipment supplier Ericsson.
Pramod Mittal, 57, owner of Global Steel Holdings, thanked his elder brother's generosity in helping him clear a significant portion of Rs 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 steelmaker ArcelorMittal.
Pramod Mittal's firms Global Steel Holdings Ltd. and Global Steel Philippines Inc. had defaulted on payments to State Trading Corporation of India, following which the state-owned company filed various cases against them.
The two firms in a statement last Wednesday said they have settled Rs 2,210 crore dues to State Trading Corporation of India.
Following this, the government-owned trading firm said it would not pursue any more winding up proceedings against Global Steel Holdings.
Sources said ArcelorMittal Chairman and Chief Executive Officer LN Mittal has extended Rs 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.
A spokesperson for ArcelorMittal, however, said: "There is no comment from LN Mittal".
State Trading Corporation of India 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, Global Steel Holdings, Global Steel Philippines and Balasore Alloys. The Central Bureau of Investigation had filed an FIR in the case.
Global Steel Holdings and Global Steel Philippines in a statement said they had a long-standing and successful business relationship with the State Trading Corporation of India since September 2003.
Due to an unprecedented meltdown in the steel industry and depression in the world economy during 2008-2010, Global Steel Philippines suffered huge losses, and consequently, a substantial amount became due and payable by Global Steel Philippines to State Trading Corporation of India, it has said.
"Pursuant to conciliation proceedings between Global Steel Holdings, Global Steel Philippines and State Trading Corporation of India, a sum of Rs 1,605 crore, inclusive of principal and interest at a rate of 13.5 percent per annum on USD benchmark rates, was awarded to State Trading Corporation of India and was to be paid by Global Steel Holdings/Global Steel Philippines as principal debtors and Pramod Mittal as a guarantor.
"State Trading Corporation of India had filed and/or caused to be filed diverse proceedings against Global Steel Holdings, Global Steel Philippines, 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 Rs 2,210 crore to State Trading Corporation, inclusive of the aforesaid Rs 1,605 crore as well as post-award interest, in full and final settlement of State Trading Corporation's claim and now no amount is due and payable to State Trading Corporation and all the proceedings have been settled.