An Indian man named Pramod Mittal is walking off with Nigeria’s $496 million dispute windfall after a controversial agreement with former Attorney-General of the Federation, Mr Abubakar Malami, over Ajaokuta Steel Complex.
Mr Mittal received $292 million from former President Muhammadu Buhari in 2022 and is asking for the rest from President Bola Tinubu.
He owns the ill-fated Global Steel Holdings, which ran Ajaokuta Steel Complex between 2004 and 2008.
Mr Obasanjo handed over Ajaokuta Steel Complex to Global Steel Holdings in 2004.
Four years later, a disagreement ensued between Mr Mittal and Nigeria’s new President, Mr Musa Yar’adua, over asset stripping allegations, leading to the revocation of the contract.
Mr Mittal had failed to make Ajaokuta Steel functional, forcing late President Yar’Adua into believing that he was stripping Ajaokuta assets and sending them to his country, India.
There were incessant litigations over the action, with Global Steel demanding $5.26 billion in court from the Nigerian government.
Throughout President Jonathan’s administration, there were discussions and litigations over the matter, but nothing positive came out of that.
When President Buhari came on board, he went for a peace deal in 2016 through his Attorney-General, Mr Abubakar Malami.
Nigeria’s attorney-general controversially entered into an agreement with Global Steel to take back Ajaokuta, promising to pay $496 million to Mr Mittal, who has a string of distressed companies and is looking for a way out of his financial crisis.
For the Buhari administration, it was a win-win situation, but for many Nigerians it is a monumental loss.
The man, Mittal
Pramod Mittal, once an Indian rich man, is well-known for steel business. He owns Global Steel Philippines and also acquired the country’s National Steel Corporation (NSC).
After acquiring NSC, Philippines discovered that Global Steel Holdings was connected to Mittal Steel of ArcelorMittal, world’s second largest steel company owned by Pramod’s billionaire brother, Mr Lakshmi Mittal.
Like Ajaokuta, Philippines’ NSC failed to take off years after the acquisition.
According to Asianometry Newsletter, “the company failed to take off. The company did produce and ship some flat steel, but far below its total capacity. A chronic lack of funds – GSPI unsuccessfully went back to the national government for additional support – as well as an adversarial relationship with the local community and government led to another closure.
READ ALSO: After promising agric revolution, Buhari govt allowed N6trn vegetables into Nigeria
“National Steel Company’s decline and fall reverberated across Iligan City and its major industries. Losses to supporting businesses were estimated at 1.4 billion pesos a year with local scrap metal collectors, service contractors, and the power utility suffering the heaviest.”
Lifestyle
Pramod Mittal lived at Kensington Palace Gardens, one of the most expensive places in London, the United Kingdom. The area was populated by some of the wealthiest people in the UK.
In 2013, he spent $82 million on his daughter’s wedding. Shristi, his daughter, had a three-day wedding in Barcelona, Spain, and some of India’s richest people were there.
A public museum was acquired for the event. There were 500 guests, served by 200 butlers, cooks and chefs from India and Thailand, according to The Standard of the UK. He had thrown a one-week party for his daughter, Vanisha, in 2004, with millions of euros spent.
The Standard quoted a former executive at City trading empire Stemcor as saying that their company’s legal department “was regularly having headaches with Pramod.”
It also quoted another industry source as saying: “Pramod was always driven by this desire to be as successful as his brother. But when your brother is Lakshmi Mittal, that’s a big ask. Many people say he’s stupid. He’s not. He can find good deals but just can’t execute them well, and that has got him into lots of trouble.”
Bankruptcy
On June 19, 2020, Mr Pramod Mittal, then 63, was declared bankrupt by a high court in the UK after failing to settle a £139 million judgment debt against him. He was indebted to a company named Moorgate Industries UK Limited.
READ ALSO: Exclusive: NNPC spends N17trn on refineries’ turnaround maintenance in 20 years
In April 2023, a UK high court judge refused to grant him permission to appeal against the revocation of his individual voluntary agreement (IVA) . According to the UK government, IVA is an “agreement with your creditors to pay all or part of your debts.”
Expert unhappy with agreement
Nigeria’s contract experts are not happy with the agreement and want President Bola Tinubu to look at the deal again.
“It is important that the Bola Tinubu administration review that agreement because it is a controversial and complicated deal that does not benefit Nigeria,” said a Kano-based lawyer, Mr Idris Ahmed.
“The deal makes no sense for Nigeria. This is nearly N1 trillion today and if we are paying the company, we should please stop. Given the current foreign exchange crisis, this deal makes no sense at all at this point,” he added.
A UK-based contract expert, Ms Mary Herth-Butler, said it was ” a big blow for Nigeria to spend the humongous amount at this point when foreign exchange crisis is severe.”
She said recent challenges with contracts in Nigeria showed that the country must begin to train its negotiators.
“Yes, considering where they were coming from, you can argue the amount of money negotiated is infinitesimal. However, you may ask yourself, as you part with almost $500 million, has Ajaokuta Steel Complex worked? What are the terms of agreement? Why did clauses in the contract not involve punishment for breaches?” Herth-Butler asked.”
“Yes, considering where they were coming from, you can argue the amount of money negotiated is infinitesimal. However, you may ask yourself, as you part with almost $500 million, has Ajaokuta Steel Complex worked? What are the terms of agreement? Why did clauses in the contract not involve punishment for breaches?” Herth-Butler asked.
“If Global Steel breached part of the contract, why are you paying them? If the government breached the contract, can you let Nigerians know what they are paying for?” she further asked.
