Gotcha!

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While Internet searching for the Global Steel Holdings Ltd [GSHL] posts a week back, I found it incredibly amazing that even foreigners have found it difficult to dis-associate Pramod Mittal and GSHL from Lakshmi N. Mittal and Mittal Steel. Here are some examples of my finds:

From Karanovic & Nikolic law office:

“We advised Global Steel Limited, a Mittal Steel company on its successful acquisition of Magnohrom, a leading metals company in privatisation. Our advice related to the privatization process and tender rules, due diligence of the target company including an analysis of the legal, regulatory and environmental framework as it is a heavy industry with production facilities.” [Emphasis added.]

Annotation : These two lawyers, Karanovic & Nikolic, hold three offices in Belgrade, Serbia; Banja Luka, Republic of Srpska; and Podgorica, Montenegro! Being lawyers, they should have known better? (See also Understanding GSHL: Epilogue 5: Show Me The Money!)

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When Solgas USA brought its Nigerian breach of contract case to the Texas 2nd Court of Appeals (2007), it presented such a tale of an obvious mistaken identity:

“Thomas Russell, the chairman and CEO of Solgas, stated that Solgas received e-mail correspondence from numerous representatives of the “Global Steel corporate family” “push[ing] hard for the opportunity to participate in the project.” Russell stated that the representatives identified themselves as working for “Ispat,” “LNM Holdings,” and “the Mittals.” Russell further stated that “[w]e were consistently told that we were dealing with ‘Ispat,’ a well-known Indian steel conglomerate, recognized for its expertise in revitalizing steel plants in the developing world.” In late 2003 and early 2004, Russell received four telephone calls from different representatives of LNM Holdings originating either in India or the United Kingdom expressing “Ispat’s interest in working with Solgas on the Ajaokuta Project.” In response to a request for information regarding LNM Holdings, Russell stated that he received information via e-mail “regarding Ispat and Lakshmi Mittal, the President and Chairman of LNM Holdings/Ispat.” During the spring and summer of 2004, Pramod Mittal, president of Global Steel, contacted Russell at least three times by telephone to express thanks for inviting him to Nigeria to view the steel plant facility and to express interest in the project.”[Emphasis added.]

Annotation : LNM Holdings have been headquartered in The Netherlands since the beginning. And even for the sake of argument that Ispat is a well-known Indian steel conglomerate recognized for its expertise in revitalizing steel plants in the developing world, it is rather odd that Solgas Nigeria really believed the hype that Ispat were experts in revitalizing steel plants? Prior to the break-up of Ispat in 1994, when Lakshmi N. Mittal formed LNM Steel Holdings, the original Ispat group had only three foreign steel mills to its name: PT Ispat Indo in Indonesia, acquired in 1974; Iron & Steel Co. in Trinidad and Tobago, acquired in 1989; and Sidemgical Del Balsar, Mexico [Sibalsa], acquired in 1991. In 1995, Lakshmi Mittal consolidated Ispat Mexicana (Sibalsa, Mexico) and Caribbean Ispat (Trinidad and Tobago), plus Ispat Sidbec, Canada and Ispat Hamburger Stahlwerke, Germany into Ispat International Ltd, a break away group from Ispat group. The latter would be transformed once again into Ispat International NV by 1997.

Incidentally, when the other Ispat group, Global Infrastructure Holdings Ltd. [GIHL] headed by Pramod Mittal, came to Nigeria to acquire Ajaokuta Steel Co. Ltd. in August 2004; all it ever had as foreign investment was a profit-sharing management contract with Libyan Iron & Steel Co. [LISCO] plus a 51%-envisaged stake at a Lukavac coke plant in Bosnia [GIKIL], both dating back 2003. Of course, in February 2004, it signed the Asset Purchase Agreement for National Steel Corporation [NSC] in the Philippines but that doesn’t really mean that NSC have been revitalized within six months of acquisition. Even its own press release stated that NSC plant, now renamed Global Steelworks International, Inc. [GSII] started commercially operating its Five-Stand Cold Mill, the heart of the steel plant, only in 26 April 2005, after starting trial production in May last year with a total of 19,930 metric tons of Cold-Rolled Coils produced for 2004 (TeamAsia, 2005).

Of which the same Texas court finds:

“The record contains the affidavit of Global Steel’s president stating: (1) Global Steel is neither a parent or a subsidiary of LNM Holdings N.V., Mittal Steel Company N.V., Mittal Steel USA, Inland Steel Co., International Steel Group, or Ispat International N.V.; (2) Global Steel is not a related business enterprise with any of these other companies; (3) none of the companies have overlapping ownership interests with Global Steel (4) none of the companies share common directors or officers or offices or employees with Global Steel; and (5) none of the companies directs the day-to-day operations of Global Steel. Although Global Steel is the holding company of Ispat Industries Ltd., a company registered in India, Global Steel’s president asserts that Global Steel does not direct its day-to-day operations.” [Emphasis added.]

Annotation : Thus, even the GSHL promoter, Pramod Mittal himself, claimed that Global Steel Holdings Ltd. [GSHL] was and is NEVER juridically connected to NM Holdings N.V., Mittal Steel Company N.V., Mittal Steel USA, Inland Steel Co., International Steel Group, or Ispat International N.V.. There is no clearer message than that!

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In the The Report The Philippines 2008 published by the Oxford Business Group, a leading publisher of economic and political intelligence on the markets of the Eastern Europe, Africa, the Middle East, Caribbean and Asia. Its publications, written by a team of analysts based on the ground for six months, our critically acclaimed publications of economic, political and business annuals have become the leading source of intelligence on the region, it states:

“India’s Global Steel Holdings, part of steel magnate Lakshmi Mittal’s umbrella of companies, said in October 2007 that it would build a blast-furnace operation on a southern Philippine island with a capacity of 3.2m tonnes per year.” (Oxford Business Group, 2008) [Emphasis added.]

Annotation : The Grey Chronicles already addressed this mistaken identity before in a previous post. To reiterate, unfortunately, this was announced by Vinod Mittal, the other brother of Pramod Mittal, and not Lakshmi Mittal. Thus, even with a team of analysts working on the ground for six months failed to see the glaring error? Or, are these published economic intelligence reports only a collection of various news articles, albeit reporting erroneously about the basic facts? This blog dared asked once: How Responsible is the Responsible Media? When will they even learn?

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Notes:

Jeffreys, Andrew [ed.] (2008). The Report The Philippines 2008. London: Oxford Business Group, 2008. p. 125. back to text

TeamAsia (2005). Global Steelworks’ five-stand cold mill starts operation. Manila: TeamAsia Strategic Marketing Communications, 26 April 2005. back to text

Texas 4th Court of Appeals (2009). 04-06-00731-CV Solgas v. Global Steel Hold. PreCYdent – Open Law Source, 03 July 2007. back to text

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