Calcutta/Lagos, April 3: Nigeria today revoked the concessions for a steel plant and an iron ore mine given to Pramod Mittal’s Global Infrastructure Holdings, while ordering criminal prosecution against him.
The Nigerian government cited “non-compliance” as the reason for revoking the concession to the west African country’s largest steel mill. The prosecution was ordered by Nigeria’s President Umaru Yar’Adua for alleged stripping of assets.
Global Infrastructure had won 10-year concessions for the 1.3-million tonne-a-year Ajaokuta Steel Co and Nigerian Iron Ore Mining Co in 2005, after it acquired control of Delta Steel Co in 2004.
The deals under former President Olusegun Obasanjo were meant to revamp Nigeria’s moribund steel industry, but they were so widely criticised that the new administration of Yar’Adua set up a panel in October to probe the transactions. Global Steel Holdings Ltd, earlier known as Global Infrastructure Holding Ltd and the promoter of India’s Ispat Industries, denied the claims.
In a statement issued late tonight, the company, which produces 13 million tonnes of steel in 6 countries, said it had already invoked international arbitration proceedings before the International Chamber of Commerce on April 1, 2008.
Global Steel said: “Without any reference to such arbitration, the Nigeria government unilaterally, by its letter dated April 1, 2008, rescinded the agreement without assigning any reason for the same.
“Such purported rescission is not in accordance with the agreement and is the subject matter of international arbitration. The legality and validity of the rescission of the agreement by Nigeria is being contested by Global Steel in the pending arbitration,” it added. However, the company is trying to amicably resolve the dispute.
Observers said it was not for the first time that an Indian company was facing such charges of asset stripping abroad. “At the same time, it is difficult to work in many of the African countries. Many times, they do not honour international contracts and agreements signed by previous governments,” they said.
