Global Steel, the worldwide steel producer controlled by the Mittal family, launched a stinging attack yesterday on the Nigerian government amid mounting concern about political interference with international companies' dealings in the West African country.
Pramod Mittal, the chairman of Global Steel, accused Nigeria of reneging on key contracts and deals it had signed with his company. The Nigerian government announced this week that it would confiscate concessions it had awarded Global Steel to run steel and iron ore plants in the country. It is also pulling out of the sale of 60 per cent of the companies that own the plants to the Mittal group.
Mr Mittal, the brother of Lakshmi Mittal, the billionaire steel tycoon who heads his family businesses, said Global Steel had already invested $450m in the Nigerian plants, and made a $192m down-payment on stakes in the companies, for which it had received no share capital.
"We are absolutely dismayed by these decisions from the new Federal Government of Nigeria," a spokesman for Global Steel said. "They have set alarm bells ringing throughout the global business community because it appears there is now in place a firm policy to confiscate all assets which have been bought in good faith by major businesses."
The row follows a change of government in Nigeria, where a new administration led by President Umaru Yar'Adua took over from the government of Olusegun Obasanjo last year. While President Yar'Adua was allied to the former President, he immediately launched investigations into deals done with Western companies by the previous regime.
This week, the Nigerian government adopted the findings of the panel which investigated the Global Steel deals, which claimed contracts "were largely skewed in favour of the concessionaire to the detriment of the Federal Government of Nigeria". Global Steel was subsequently stripped of its concessions to run Ajaokuta Steel and Nigerian Iron ore Mining, which had been due to run until 2015.
But Mr Mittal rejected Nigerian accusations that it had been engaging in asset stripping in the country.Reuse content