ED attaches Usha Martin assets worth Rs 190 cr over illegal iron ore sales

Mineral sold was meant for firm's captive use; attached properties pertain to Usha Martin's wire rope business, mines were transferred earlier to Tata Steel as part of steel biz sold

The Enforcement Directorate (ED), Patna, has provisionally attached immovable properties of Usha Martin valued at around Rs 190 crore.

The order passed against the company is in connection with the sale of iron ore extracted from the mines in Ghatkuri, West Singhbhum, Jharkhand, allotted for captive use for the company.

The immovable properties pertain to Usha Martin's wire rope business. The mines however have been transferred to Tata Steel as part of the steel business sold earlier.

Usha Martin managing director, Rajeev Jhawar, said that any liabilities that arise from the conclusion of the case would be on Usha Martin not Tata Steel.

The order is to provisionally attach the property of the wire rope business for a period of 180 days and the company has been directed not to dispose of or transfer the property without the consent of the ED.

The order for provisional attachment was issued by the ED on August 9 and was received by Usha Martin on August 16.

In a statement, the company said that the High Court of Jharkhand at Ranchi had held in its order on February 12, 2012 that the company had the right to sell the iron ore from iron ore mines as per terms of the mining lease.

Usha Martin also said that it disagrees with the ED order and would take appropriate legal action to contest the same.

The company submits that it has conducted its iron ore mining operations in accordance with the mining lease deed and sanction letters/permission from relevant authorities, read the statement.

The company has been given to understand that it does not affect the ongoing operations of the company, it said. Usha Martin is one of the leading wire rope manufacturers in the world.

The ED order is based on an FIR filed by the Central Bureau of Investigation (CBI) which was based on a complaint that the company was permitted to use the iron ore for captive use only.

The company is fully cooperating with the CBI in its investigations and is hopeful of a positive outcome.

Usha Martin also said that with the conclusion of its steel business to Tata Sponge Iron Limited, it had successfully deleveraged its balance sheet by reducing debt from around Rs 4,500 crore to approximately Rs 600 crore. The Tata Steel deal was approximately for Rs 4,300 crore.