Lakshmi Mittal helps younger brother Pramod pay STC shares



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NOVA DÉLHI (Reuters) – Steel tycoon Lakshmi N Mittal helped his younger brother, Pramod, pay the State Trading Corporation a fair amount of money, helping to avoid legal problems.

This is the second instance in so many weeks of wealthy brethren rescuing their brethren from a crisis. Last week, the wealthiest Indian, Mukesh Ambani, helped his younger brother Anil avoid a prison sentence by paying the debts owed to Swedish telecommunications equipment supplier, Ericsson.

Pramod Kumar Mittal, 57, owner of Global Steel Holdings, thanked his older brother for his generosity in helping him release a significant portion of Rs 2,210 crore.

"I am very grateful to my brother Lakshmi Mittal for helping to settle the obligations to the State Trading Corporation of India. This generosity guaranteed compliance with the order of the Supreme Court," he told PTI.

The Mittal brothers split the business in 1994 with their older brother directing the world's largest steelmaker, ArcelorMittal.

Global Steel Holdings (GSHI) and Global Steel Inc. of Pramod Mittal did not pay the payments to STC, after which the state company filed several lawsuits against them.

The two companies said on Wednesday they had paid Rs 2,210 crore to STC.

After that, state trading said it would no longer proceed with the liquidation process of Global Steel Holdings Ltd.

Sources said ArcelorMittal's chairman and chief executive officer, L N Mittal, provided financial aid of Rs 1,600 crore to Pramod Mittal, who has rescued him from several criminal and other lawsuits.

"The support he (LN Mittal) showed the family in a time of need is a testament to their strong values," Pramod said.

However, an ArcelorMittal spokesman said: "There are no comments from Mr. L N Mittal".

STC, owned by the government, is a major international trading company mainly engaged in export and import operations.

The Executive Board had already initiated several criminal proceedings against Pramod Mittal, GSHL, Global Steel Philippines Inc and Balasore Alloys, and the Central Investigation Office had filed a FIR in the case.

GSHL and GSPI in a statement said they had a longstanding and successful business relationship with the State Trading Corporation of India Limited (STC) since September 2003.

Due to an unprecedented collapse in the steel industry and depression in the world economy during 2008-2010, the GSPI suffered huge losses and, consequently, a substantial amount became due and payable by the GSPI to the STC, he said.

"According to the reconciliation procedures between GSHL, GSPI and STC, an amount of Rs 1,605 crore, including principal and interest at a rate of 13.5 per cent per annum on the USD reference rates, was granted to the STC and would be paid by GSHL / GSPI as principal debtors and Pramod Mittal as guarantor.

"The STC had filed and / or provided various proceedings against GSHL, GSPI, Pramod Mittal and others in order to recover that amount," the statement said.

He added that Pramod Mittal paid and / or paid a total amount of Rs 2,210 crore to STC, including those Rs 1,605 crore, as well as post-premium interest, in the total and final settlement of the STC claim and now without the amount is due and payable to STC and all proceedings have been resolved.

Last week, Reliance Communications of Anil Ambani made a payment of 550 million rupees, including interest, to Ericsson, just one day before the Supreme Court's deadline to charge a three-month prison term.

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