Bush beats Mittal at his own game

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The Independent Online

Lashmi Mittal, the controversial steel magnate who caused a storm when the British ambassador lobbied for him to win a deal in Romania, could be hoist by his own petard in the battle to control the Polish steel industry.

LNM, the group controlled by the Anglo-Indian businessman, is vying with American rival US Steel in a $560m (£350m) battle for Polskie Huty Stali (PHS), Poland's largest steel maker.

PHS, which dominates the country's steel sector, is being sold by the Polish government. It wants the winner to take on PHS's $410m of debts and inject about $150m of equity. Both bidders have put in final offers and a decision is expected in a few weeks.

But the pendulum may have swung in US Steel's favour, as George Bush is to make a presidential visit to Poland this week. The visit has been promoted as supporting "warm ties" between the Americans and Poles but few doubt President Bush will lobby on behalf of US interests. Recently the Poles decided to buy US fighter planes in preference to British and French rivals.

Mr Mittal is in no position to ask the UK Government to help him redress the balance. Last year he faced controversy after it emerged that the British ambassador in Bucharest had lobbied on LNM's behalf as it fought to secure the £300m purchase of Romanian steel maker Sidex.

Mr Mittal has given £125,000 to the Labour Party. The situation was complicated because, although LHM is run out of London, it is registered in an offshore tax haven. It has few UK operations, but owns businesses in eastern Europe, the Far East and South Africa.

An LNM spokesman said the company has not asked for UK government for support in the PHS bid. The battle is likely to be intensely political, as any winner will have to cut jobs at the loss-making business.