The Central Bureau of Investigation (CBI) has booked Pramod Kumar Mittal, brother of steel giant LN Mittal, and a former top official of State Trading Corporation (STC) for causing a loss of over Rs 2,000 crore to the public sector undertaking (PSU) allegedly through corrupt means. The CBI has alleged that Mittal and his company Global Steel Holdings Limited, where he was chairman earlier, defaulted on credit re-payments to the STC, causing an estimated loss of Rs 2,112 crore to it. In its 19-page FIR, the CBI has also named Lalit Sehgal, the then chief executive officer of Global Steel Philippines Inc and 18 other accused including the then chairman-cum-managing director of the STC Arvind Padalai and 18 former honchos of the PSU.
The company Global Steel Holdings Limited, which was set up in tax haven Isle of Man and Global Steel Philippines Inc, has also been named as accused in the FIR which is registered for charges of criminal conspiracy, cheating and corruption. An e-mail sent to a company where Mittal is currently the chairman did not elicit any response till the time of going to press.
It is alleged that GSHL had approached STC in 2003 seeking assistance in financing facility by issuing Letters of Credit for purchasing raw materials required for their newly acquired steel plants in the Philippines and Bosnia The STC sent a communication to Indian Ambassador in the Philippines seeking feedback about the constitution of the company, strength of assets, investment climate to which he responded that the embassy was not in a position to provide such details and advised to carry out further inquiries to protect its interests, the FIR alleged.
The STC guidelines mandated to get a credit rating done in such cases from specialised agencies but no report regarding financial health of the company and associates was obtained despite the suggestion of the Ambassador, it alleged “From the initial stage, STC was exposed to financial risk and undue favour was shown to the Associate by them,” it said.