The detention of Pramod Mittal, younger brother of Lakshmi Mittal, in Bosnia was effected with the intention dislodging the present management of Global Ispat Koksna Industrija doo Lukavac (GIKIL) as part of a hostile takeover attempt, said Global Steel Holdings Limited (GSHL).
Mittal was slapped with a one-month detention order by a Bosnian court, recently, for alleged involvement in a fraudulent transaction. On Tuesday, however, he and two other executives were released on bail and an amount of 12.5 million euros was deposited in a court escrow account.
About 14 years back, GSHL - a holding company for Pramod Mittal companies - had taken over the management of GIKIL. The supervisory board, however, was jointly managed with a local company KHK, owned by the government of Bosnia.
GIKIL is co-owned by Pramod Mittal who is also the chairman of the supervisory board.
While KHK is owned by the government of Bosnia, supervisory board nominations are made by the government of Tuzla canton. "These included important persons such as the former Bosnian Prime Minister and members of the government," GSHL said.
GSHL also said that the day-to-day operations of GIKIL were being handled by board members, comprising an Indian and three Bosnians. The supervisory board has no role to play at all, clarified GSHL.
The collusion to dislodge the company’s management was carried out with the intention of damaging the reputation of GIKIL in Bosnia and abroad, where the company is valued in excess of $100 million, reducing this to nothing and aid and abate a hostile take-over attempt, GSHL said.
Moreover, the company pointed out that Mittal had already the settled $372 million debt owed to STC in India.
"It is, against this background, contemptible and absurd to suggest any involvement with any fraudulent financial transaction to the tune of only $12 million," GSHL said.
However, brother Lakshmi Mittal had helped Pramod pay a major chunk of the settlement amount to STC.
GSHL also said that the detention, as carried out, was illegal. The activities were in violation of both United Nations human rights treaties and of the European Convention on Human Rights, it added.
"The activities, as carried out, were thus flagrantly contrary to the law and will be vigorously responded to in court. In the process, and as always been the case, we will afford complete cooperation to Bosnian authorities, " GSHL said.