Citizens' Issues
Finally, Pramod Mittal is in CBI net for cheating STC for over Rs2,100 crore
The Central Bureau of Investigation (CBI) on Monday filed a case of cheating and corruption against Pramod Mittal and 20 others for allegedly causing a loss of about Rs2112 crore to State Trading Corp (STC). Mittal was chairman of Global Steel Holdings Ltd, while the other accused include some of the top officials of STC. 
 
According to complaint filed by the state-run STC, Mittal committed criminal breach of trust as he failed to make payments as per terms and conditions of the agreement with STC. The STC had arranged export of raw material for new steel plants of Global Steel Philippines Inc (GSPI) in the Philippines and Bosnia and also opened line of credit for the company, the complaint alleged. 
 
Despite irregular payments and piling up of credit, STC officials allegedly renewed line of credit to the company. The cheques given by Global Steel Holdings and its subsidiary Global Steel Philippines to STC were allegedly dishonoured resulting in loss of Rs2,112 crore to the public sector undertaking, the complaint alleged. 
 
According to a note from the Ministry of Commerce prepared in 2010, the memorandum of understanding (MoU) entered into between Global Steel and STC delineated STC's role as a facilitator by opening LCs on various suppliers for import of pellets, lump ore, iron ore and coal to their plants in Bulgaria and Philippines. The materials were to be released to Global Steel on a cash and carry basis. But things went haywire. And to quote the note, "the developments in (Global Steel's) operations were not brought out till October, 2008". One plant (Bulgaria) went into liquidation while the value of the stocks of the Philippines plant plummeted. 
 
Mittal and STC worked out a debt payment schedule: “Payment of entire dues to STC would be made in nine monthly instalments commencing from September 2008. Additionally, the amount outstanding to STC will be secured by way of equitable pledging of shares of Global Steel in favour of STC,” the note says. 
 
After paying the first instalment, however, Mittal defaulted. Another blow was that Global Steel shares were not quoted and, therefore, no intrinsic value could be attached to them. 
 
The commerce ministry raised serious doubts in its note dated 13 May 2009: "There seems to be a number of issues which have not been addressed squarely by STC. For instance, in the Philippines/ Bulgarian operations, STC sells the material and then takes it back to keep it under collateral management; why such an arrangement has been made is not clear. In both the cases, there appears to be no satisfactory answers as to why STC did not encash the performance-based guarantees and other securities when it was seen that the firm is not able to get the stocks liquidated. Similarly, there are no direct answers as to when the Bulgarian company went into liquidation. If STC had prior knowledge, why did it continue to supply the material?" 
 
The note went on to say: “It may be noted that the CMD of the Corporation who was delegated all powers in respect of the Ispat-Bulgaria transaction apparently did not keep the board completely in the picture. Only when the situation became bad due to defaults, especially after September-October 2008, were the government and the board brought on board (sic). The board is apparently not satisfied with the position so far either by way of full facts and figures or by way of progress of recovery of dues..." 
 
Besides Mittal, the CBI has also named Lalit Sehgal, the then chief executive of GSPI, Arvind Pandalai, the then Chairman cum Managing Director of the STC and 18 other officers of the state-run corporation.
 
For nearly 20 years now, Pramod Mittal has made news mainly because of his perpetually high debts, loan restructuring and, eventually, selling out his steel plant supposedly for a pittance. This, too, happened only after a two-time corporate debt restructuring (CDR) involving massive write-offs. Although the Mittals have been defaulters even in the 1990s, Pramod Mittal’s Ispat group was bank-rolled for a series of global adventures after 2003 that have all run into trouble. These include contracts and major acquisitions in Bulgaria (including a football club), Nigeria and the Philippines, which are all mired in controversy. Employees of Ispat’s Nigerian business have reportedly remained unpaid shortly after 2006 and have been left high and dry.
 
You may also want to read...
 
 

User

COMMENTS

p venkateswara

7 months ago

Loans by public sectors are given on power of person and not seeing legal documents

p venkateswara

7 months ago

Loans by public sectors are given on power of person and not seeing legal documents

P b Sarma

7 months ago

"There was no accountability for "VIP " loans recommended by politicians.Now due to pressure from public the Banks,Govt and CBI are forced to fix accountability and prosecute the defaulters for misrepresentation or misuse of funds.Let us see how far this will penetrate.

REPLY

Pradeep Kumar M Sreedharan

In Reply to P b Sarma 7 months ago

The so called prosecution, is simply to limit the liability, against future possible petitions, invrtigations and criminal actions. This is the last stage of the plot, ie the climax of the story. Ha ha.

No red beacon vehicles for Punjab ministers, officials
Chandigarh, The Punjab cabinet, in its first meeting here on Saturday, decided that the Chief Minister, legislators and top officials will not use a red beacon on their official vehicles.
 
Punjab Finance Minister Manpreet Singh Badal told the media after the meeting that the Chief Minister, ministers and legislators will also not lay foundation stones and won't do inaugurations.
 
"Even for big projects of Rs 100 crore or Rs 200 crore, the names of the Chief Minister and ministers will not be displayed (on the foundation or inauguration stones). It will carry only one line saying that the project has been executed with the money of the taxpayers," Badal said.
 
The Amarinder Singh-led Congress government assumed charge in Punjab on March 16 after the party swept the state assembly polls on March 11, winning 77 out of 117 assembly seats.
 
Disclaimer: Information, facts or opinions expressed in this news article are presented as sourced from IANS and do not reflect views of Moneylife and hence Moneylife is not responsible or liable for the same. As a source and news provider, IANS is responsible for accuracy, completeness, suitability and validity of any information in this article.
 

User

Kaushal Bag, the young techie from Nashik, commits suicide
Mobile app developer and technology expert from Nashik, Kaushal Bag has committed suicide on Wednesday. Kaushal, more famous for developing several apps to help people during the Kumbh Mela, Chennai floods and on women safety, was second year student of Computer Science at KK Wagh Arts, Commerce, Science & Computer Science College. 
 
Kaushal had developed 'Helping Hand', a mobile app that had a facility to place an emergency call even when there was not network connectivity or internet connection available. During the Nashik Kumbh Mela, this app was in its initial stage and used as an automated SMS application. In emergency, the user could sent automated SMS to pre-fed emergency numbers. 
 
However, his app OCS proved helpful for over 18,800 people who were stranded in Chennai floods. Speaking with DNA, Kaushal had said, "We realised that our free link was downloaded by two crore people all over by December. During the floods, too many SMSes were sent and we had to route them to our server. We got to know the location of the stranded people and informed the NGOs working on ground. In this way, we helped rescue nearly 19,000 people. This was a great and satisfying achievement".
 
The app was also used during the Ujjain Kumbh Mela in 2016. 
 
Kaushal's efforts were even appreciated by Mark Zuckerberg of Facebook. Last month, Kaushal did a live telecast on Facebook of a half marathon organised by Nashik Police. He was felicitated by Dr Ravindra Singhal, the Police Commissioner of Nashik for this effort.
 
Kaushal, in a tweet to Prime Minister Narendra Modi, had expressed his desire to donate his app to all sectors across India.
 

User

COMMENTS

Leon Fernandes

7 months ago

Why did he commit suicide?

Sivakumar Subbiah

7 months ago

Rest in Peace...We do not want such bright young people to commit suicide...He could have served society more...What drive him to suicide?

Milind Nadkarni

7 months ago

Sad to see a talented and young life lost so early in its journey. Wonder what could the reasons for this sad event, We may not ever know...... May his soul rests in peace.

Roy Aranha

7 months ago

good days new govt make in india no action , ruin has begun sad and tragic

sunil

7 months ago

The reason for tragic suicide should be proved to guide others

Dharmesh Bhuta

7 months ago

This is so Shocking and tragic.

We are listening!

Solve the equation and enter in the Captcha field.
  Loading...
Close

To continue


Please
Sign Up or Sign In
with

Email
Close

To continue


Please
Sign Up or Sign In
with

Email

BUY NOW

The Scam
24 Year Of The Scam: The Perennial Bestseller, reads like a Thriller!
Moneylife Online Magazine
Fiercely independent and pro-consumer information on personal finance
Stockletters in 3 Flavours
Outstanding research that beats mutual funds year after year
MAS: Complete Online Financial Advisory
(Includes Moneylife Magazine)