The steel magnate, Lakshmi N Mittal, is the chairman and CEO of ArcelorMittal, the world’s largest steel making company. He has two younger brothers- Pramod Mittal and Vinod Mittal, and a sister. The Mittal brothers split the business in 1994, with the elder brother going on to head the world’s largest steel manufacturing company.
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The Case
Promod Mittal, who heads the firms- Global Steel Holdings Ltd. (GSHI) and Global Steel Philippines Inc (GSPI) -had defaulted on payments to the State Trading Corporation, following which the state-owned company went on to file various cases against him.
The Inside Story
State Trading Corporation is owned by the government and is a premier international trading company that deals in exports and imports operations.
It all started with the unprecedented meltdown in the steel industry and depression in the world economy during 2008-2010, when Global Steel Philippines Inc suffered huge losses and consequently, a substantial amount became due and payable by Global Steel Philippines Inc to State Trading Corporation.
A sum of Rs. 1605 crore inclusive of principal and interest at the rate of 13.5 percent per annum on USD benchmark rates, was awarded by Promod Mittal as a guarantor on behalf of GSHL/GSPI as principal debtors.
The Rescue
The Central Bureau of Investigation had earlier filed an FIR in the case, with the Enforcement Directorate initiating various criminal proceedings against Pramod Mittal, GSHL, GSPI, and Balasore Alloys.
Sources say that the ArcelorMittal chairman and CEO, Lakshmi Niwas Mittal, had extended Rs. 1600 crore of financial help to his younger brother, which in turn has bailed him form legal troubles.
The Gratitude
Although there has been no disclosure of the amount from L N Mittal, Pramod’s gratitude towards his elder brother shows that his helping hand had helped him clear a significant portion of Rs. 2210 crore of dues to the STC. All the proceedings were settled and the STC received the full and final settlement of its claim with no amount due and payable.
This is the second case in this year, where the wealthy siblings had helped their younger bothers bailout from a crisis. Earlier in this year, Mukesh Ambani helped his younger brother, Anil Ambani avoid jail term by paying off dues Rs. 550 crore owned by him to the Swedish telecom equipment supplier Ericsson.
