Why Pramod Mittal Gets Angry

Posted: Sunday, Jan 05, 2003 at 0000 hrs IST
Updated: Sunday, Jan 05, 2003 at 0000 hrs IST

Font Size

Feedback

Discuss

Mumbai, January 4:: His palatial house in London costs around $17 million, and was once likened by the head of a financial institution to Indraprastha, the abode of the king of Gods. His relatively more humble flat at Carmichael Road in Mumbai boasts a fleet of expensive cars, including a Lexus, a couple of Mercedes, a Pajero and a clutch of smaller ones parked outside.

And in between haggling with lending banks and institutions to restructure his loans, he zipped off to Tokyo earlier this year in a chartered flight to watch the World Cup final live!

Meet Pramod Mittal, the steel magnate whose group loans exceed Rs 8,580 crores (end March 2002) but is having big trouble paying them back. His bankers suspect him of diverting money, and his steel plant is plagued with multi-crore cost overruns. But Mittal - noted for his political clout - isn’t worried.

“Why should I justify my deeds to the press when my balance sheets will talk for me soon?’’ an irked Mittal asked the Express Group. His bankers aren’t so sanguine. “Pramod Mittal takes a lot of risks, which is fine, but the problem is that he takes it on our money!” says a senior official of the Industrial Development Bank of India (IDBI).

The bigger problem is that the banks are letting him get away with it, a classic example (like two other steel supremos, the Sajjan Jindal group and the Essar Group) of how despite the tough new law to crack down on defaulters, it’s possible to get away. Mittal uses his clout and bank fears that classifying loans as non-performing assets (NPAs) will affect the lenders’ own credit ratings.

Like before, Mittal’s Ispat Industries is busy re-negotiating loans on the persuasive claim that steel prices in an industry gripped by a downturn have turned around in the last few months and the trend is expected to continue for a few years. So much so that lenders themselves are sold on the idea that three years down the road, India will face a shortage of steel because there are no new capacities being added.

The ...

Post Comments

Comments: (Limit 3,000 characters)

Name		Message
Email ID
Subject

TERMS OF USE:
The views, opinions and comments posted are your, and are not endorsed by this website. You shall be solely responsible for the comment posted here. The website reserves the right to delete, reject, or otherwise remove any views, opinions and comments posted or part thereof. You shall ensure that the comment is not inflammatory, abusive, derogatory, defamatory &/or obscene, or contain pornographic matter and/or does not constitute hate mail, or violate privacy of any person (s) or breach confidentiality or otherwise is illegal, immoral or contrary to public policy. Nor should it contain anything infringing copyright &/or intellectual property rights of any person(s).

I agree to the terms of use.