Sibling love again: LN Mittal helps Pramod pay State Trading Corp claims

Illustration: Ajay Mohanty
Long before the news splashed that a billionaire elder brother had come to the rescue of a sibling on the verge of being sent to jail for non-payment of dues, another brotherhood story was playing out in Indian business world. This story was one of the Mittals. 

It is understood that billionaire Lakshmi Mittal has helped younger brother Pramod pay off a significant portion of the Rs 2,210-crore claim by the State Trading Corporation of India (STC). 

The elder brother is said to have given approximately Rs 1,600 crore to Pramod. A friend of Lakshmi Mittal said, “It’s true that Lakshmi stepped in to ensure there were no proceedings as a result of liabilities to STC. I believe there was a payment in November and another one in February. Family is very important to him (Lakshmi) so it’s not surprising he would help his brother out.” 

A spokesperson for Lakshmi Mittal declined to comment. When contacted, Pramod Mittal’s spokesperson said he had no comments to offer.

The Mittal brothers had split business way back in 1994. Pramod is the middle brother and Vinod, the youngest. The family’s steelmaking journey started with father Mohan Lal Mittal, but Lakshmi Mittal charted his own course and founded Mittal Steel later. 

In the last 25 years, Lakshmi Mittal has made about a dozen acquisitions to build a global steel empire that’s just a shade shy of India’s crude steel production. Lakshmi Mittal built a $76-billion empire that has operations in more than 60 countries.

Global Steel Holdings (GSH) in a statement on March 20 said Pramod had paid and/or caused to be paidRs 2,210 crore to STC as a full and final settlement. 

The settlement by Pramod and his firms led to the quashing of proceedings including various criminal cases against him, GSH, Global Steel Philippines and Balasore Alloys by the Enforcement Directorate and an FIR by the Central Bureau of Investigation.

STC also said it would not be pursuing any more winding-up proceedings against GSH. 

STC had filed diverse proceedings against GSH, GSP, Pramod and others to recover dues. According to conciliation proceedings between GSH, GSP and STC, a sum of Rs 1,605 crore , inclusive of principal and interest at the rate of 13.5 per cent per annum on USD benchmark rates, was awarded to STC and was paid by GSH/GSP as principal debtors and Pramod Mittal as guarantor. 

Consequent to the settlement, all proceedings had been resolved and settled as per Supreme Court orders passed on December 6, 2018, and March 12, 2019.

STC’s relationship with Pramod Mittal companies dates back to September 2003. The meltdown in the steel industry and the global financial crisis between 2008 and 2010 led GSP to suffer huge losses and as a result a substantial amount became due and payable by the company to STC. 

Last week, Mukesh Ambani bailed out younger brother Anil by helping him repay Reliance Communications’ Rs 462-crore dues to Ericsson at the last minute, staving off a three-month jail term. The younger Ambani publicly thanked Mukesh and his wife Nita Ambani.

Brother lends a helping hand

  • Lakshmi Mittal (left) helps Pramod pay approxmimately Rs 1,600 crore of STC claims of Rs 2,210 crore. Part of the support was extended in November and part in February
  •  Settlement led to the quashing of various criminal cases against Pramod, GSH, Global Steel Philippines and Balasore Alloys by the ED and an FIR by the CBI 

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