The Nigerian government has settled to pay almost $500 million to Global Steel Holdings Limited (GSH) to bring an end to a long-standing contract dispute over the Ajaokuta Steel Mill deal.
Pramod Mittal, chairman of GSH, is effectively getting a helping hand- and a possible way out of financial distress – from Nigerian taxpayers, Bloomberg reported on Friday.
The agreement, tainted by allegations of fraud from a previous administration, has resurfaced, shedding light on the controversial journey of Pramod Mittal and his involvement in Nigeria’s steel industry.
Global Steel sought arbitration at the International Chamber of Commerce, Court of Arbitration in Paris in 2008 when the government of the late Umaru Yar’Adua terminated the contracts.
From 2011 to 2020, there were numerous unsuccessful attempts by the Nigerian government and Global Steel to settle. Abubakar Malami, the former Attorney General and Minister of Justice for Nigeria, spearheaded the negotiations.
Linklaters, Sidley Austin, and King and Spalding took turns representing Global throughout the duration of the dispute. The prolonged nature of the dispute was attributed to the breakdown of a prior settlement, which necessitated a restructuring of Global’s interests rather than a straightforward buy-out.
Despite King and Spalding’s initially claiming $5.26 billion, Nigeria succeeded in negotiating a substantial 91 percent reduction, ultimately settling the entire claim for $496 million.
Entering the Nigerian Steel Scene
GSH, headquartered in the United Arab Emirates (UAE), made its foray into the Nigerian steel industry in 2004 during the Olusegun Obasanjo administration. The ambitious move involved acquiring five major concessions and share purchase contracts, with a pivotal plan to manage and eventually acquire the Ajaokuta Steel Company Limited.
However, these grand plans were halted in 2008 when the Nigerian government accused GSH of asset stripping, leading to the revocation of the contracts.
The Enigma: Pramod Mittal
Behind the headlines lies Pramod Mittal, a 67-year-old Indian businessman with a deep-rooted history in the steel industry. As the younger brother of Lakshmi Mittal, the world’s wealthiest steel magnate, Pramod’s journey has been anything but smooth.
With a track record of financial troubles and multiple bankruptcies, his story took a dark turn when he assumed the role of guarantor for the debts of Bosnian coke producer GIKIL.
The Downfall
Pramod Mittal’s financial downfall began 17 years ago when Global Steel Holdings, registered in the Isle of Man, stood as the guarantor for GIKIL’s debts.
A series of missed payments led to bankruptcy proceedings initiated by Moorgate Industries, resulting in a staggering £139,786,656.43 bankruptcy order against Mittal in June 2020. His Bosnian misadventure also led to an investigation and arrest on charges of organized crime, though he was later released on bail.
Early Life and Lavish Lifestyle
Born in India in 1956, Pramod Mittal led a life of opulence, highlighted by a jaw-dropping $82 million (£50 million) wedding for his daughter Shristi in Barcelona in 2013. Following in his brother’s footsteps, he founded GSH in 1993, which thrived for years before financial difficulties struck in the late 2000s.
Bankruptcy and Legal Turmoil
The financial woes of Pramod Mittal escalated in 2019 when GSH was put into liquidation over a substantial debt owed to Moorgate Industries Ltd. His bankruptcy extended beyond the UK, as Bosnia and Herzegovina declared him bankrupt in 2023.
Legal troubles have been a constant companion, with Mittal ordered to pay nearly €11 million in damages to GIKIL in 2019 and facing accusations of heading an organised crime group in Bosnia.
Current Status: From Crisis to Nigerian Payout
Prior to the recent Nigerian government payout, Pramod Mittal found himself entangled in financial ruin across multiple countries, battling legal challenges on various fronts. The unexpected windfall raises eyebrows and invites speculation on the future of this once-thriving steel tycoon.(BusinessDay)
