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.
 
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COMMENTS

P b Sarma

6 days 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 5 days 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.

Nifty, Sensex to move sideways - Monday closing report
We had mentioned in Friday’s closing report that Nifty, Sensex may pause for breath. Indian Equity Markets ended lower on Monday after a three day rally as investors chose to book profits caused by the rally in the previous week. The trends of the major indices in the course of Monday’s trading are given in the table below:
 
 
The key indices ended in red as the software services exporters worried over strong rupee and a slowdown in business. Shares of IT companies plunged on reports that Cognizant may reduce at least 10,000 jobs, representing 5% of its total workforce, as the company looks to shift its focus from traditional IT services to digital. The rupee strengthened slightly to 65.4124/4150 per dollar, close to the near 17-month high of 65.2250 hit last week.
 
The shares of Idea Cellular fell by 11% on BSE after the announcement of the board approving the merger with Vodafone’s Indian operations, reversing the earlier gains of 14.25%. This decline was observed because the investors thought that the deal values the stock of the company much lower than the current market price; the promoters however rejected the valuation rumours. Voadafone India will own 45.1% of the combined entity, the promoters of Idea will own 26% and the rest will be held by the public. 
 
The markets, on an overall level, remained positive on hope for additional economic reforms from the government. A government official has said that the Modi Cabinet has approved four bills to implement a planned Goods and Services Tax (GST); the landmark tax will be implement from July 1. Analysts have said that the concern over high share valuations and lack of big events is likely to keep the markets rangebound. The IT sector accounted for around 50% of the losses on the CNX Nifty index, led by TCS falling by 1.97% and Infosys 1.92%. Kotak Mahindra bank rose by1.23% after it announced on Friday that it would seek approval from shareholders to raise the foreign shareholding limit up to 49%. HCL Technologies hit its 52-week high of Rs879.15, ahead of its board meeting to consider a buyback proposal. 
 
On the NSE, there were 701 advances, 774 declines and 76 unchanged. On the BSE, there were 1,354 advances, 1,443 declines and 226 unchanged.
 
The top gainers and top losers of the major indices are given in the table below:
 
 
The closing values of the major Asian indices are given in the table below:
 
 

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Marks and Spencer pulls online ads from Google
London, UK-based retail chain Marks and Spencer on Monday became the latest firm to pull its online advertising from Google platforms over fears it is appearing next to extremist content.
 
It follows a UK government decision to remove its adverts from YouTube -- which is owned by Google -- after it emerged they had appeared alongside content from supporters of extremist groups, the BBC reported.
 
RBS, Lloyds and HSBC also announced similar moves over the weekend.
 
Google has said it does not always "get it right" and will improve.
 
The move follows a recent investigation by The Times, London, which found adverts from a range of well-known firms and organisations had appeared alongside content from supporters of extremist groups on the YouTube video site.
 
An ad appearing alongside a video earns the poster about 6 pounds ($8) for every 1,000 clicks it generates, meaning brands may have unwittingly contributed money to extremists.
 
Last week, ministers summoned Google for talks at the Cabinet Office after imposing a temporary restriction on the government's own adverts, including for military recruitment and blood donation campaigns.
 
Others such as fastfood chain McDonald's, beauty giant L'Oreal and luxury carmaker Audi, as well as the BBC, the Guardian and Channel 4, have suspended their advertising on both Google's search engine and YouTube site.
 
Sky News and Vodafone are also considering suspending their ads.
 
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.

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