Re: [IAC#RG] Obscene: How Mittal could spend 60 million Euros on daughter's wedding in Spain

Convenor
This information will be of interest to Govt. of West Bengal who are deeply in debt and wants some relief.
With kind regards



A.K.BHATTACHARYYA

F.I.StructE (UK), FIE (India), FIBE, FIRT
H-2A, Hauzkhas, New Delhi -16, Ph:011-26854127

--------------------------------------------
On Fri, 12/13/13, Sarbajit Roy <sroy.mb@gmail.com> wrote:

Subject: [IAC#RG] Obscene: How Mittal could spend 60 million Euros on daughter's wedding in Spain
To: "indiaresists" <indiaresists@lists.riseup.net>, "indiamanager" <indiamanager@googlegroups.com>
Date: Friday, December 13, 2013, 10:05 PM

Bully for the
Spaniards who are "upset at this obscene display of
wealth which trashes their culture", What
were we Indians doing ? Does the AAM AADMI PARTY have
anything to do with  this, and why their deafening silence
on this scandal ? Did Sunita Kejriwal ever investigate this
serious fraud on the Hindustani nation ?
(http://www.jswispat.in/management.htm)
And why were the Karat's so quiet when
Hindustan's starving workers were angry but goras were
apparently chomping foie-de-gras (mashed goose liver)
secretly behind the shrubberys?

http://www.moneylife.in/article/pramod-mittal-spent-60-million-euros-on-daughters-lavish-wedding/35570.html?


Pramod Mittal
represents but one example of the quiet,
high-stakes game of rich, influential bank defaulters that
often misuse
the CDR route without a slight change in their lavish
lifestyle or
spending



Pramod Mittal, the younger brother of steel tycoon Lakshmi
Mittal, owes
a lot of money to Indian banks. However, instead of
repaying bank
loans, both Pramod and his brother Vinod
Mittal have managed to use the corporate debt restructuring
(CDR) route
repeatedly to escape unscathed. Surprisingly, despite being
a bank
defaulter, Pramod Mittal has reportedly spent 60 million
Euros (about
Rs505 crore) for his daughter's lavish wedding in
Barcelona.



According to a report from
Vanitatis
(Spanish news portal), the wedding of investment banker
Gulraj Behl and
Shristi Mittal, the 26-year old daughter of Pramod Mittal
and exercise
director of Global Resources of Europe, could become one of
the five
most expensive weddings in history, as per the figures.
"One of the
employees of the municipality that is well connected to high
places told
us that probably the figure among all parties, lodging,
rental of
premises, hotel rooms and other expenses to be determined,
could exceed
60 million Euros. So, according to Forbes, this
wedding would
be located in the second, between Mohammed bin Zayed Al
Nahyan, ruler of
Abu Dhabi, and Princess Salama, where it cost 76.25 million
Euros in
1981 and of the Prince of Wales, for which 53 million Euros
was paid in
that year also. For now, Lakshmi Mittal's daughter,
Vanisha, holds third
place when she married in 2004 with Amit Bhatia, the Indian
billionaire
and disbursed no more and no less than 46 million
Euros," the report
says.



Pramod Mittal wanted discretion for this wedding but his
ostentation made news. Mumbai Mirror,
using quotes from Spanish media had said politicians and
prominent
citizens trashed the whole affair (the Mittal wedding) as
'obscene
display of wealth' for which 'the national pride was
on sale'.



Coming back to Pramod Mittal's outstanding bank dues,
as reported by
Moneylife,
during the end 2010, State Bank of India (SBI) gave a fresh
loan worth
Rs130 crore to Ispat Industries (it was controlled by the
Mittals at
that time) adjusting Rs30 crore against earlier
dues.



So, why would the bank sanction a fresh loan if it has to
take back
part of the money? Apparently, SBI was indulging in what is
called
'evergreening'. By getting back part of the money, SBI
has avoided
classifying the loan as 'bad' which would have
forced a series of
actions. But SBI's action is in violation of the spirit
of the Reserve
Bank of India (RBI) guidelines. When Moneylife
contacted them about this largesse, both SBI and Ispat
Industries kept mum at that time.



Ispat Industries has failed to live up to every commitment
it made as
part of the corporate debt restructuring package so
generously approved
by lenders in 2003.



Pointing out that the credit appraisal committees of public
sector
banks (PSBs) had powers to sanction single loans up to Rs400
crore in
the case of large banks and up to Rs250 crore in the case of
small
banks, Vishwas Utagi, general secretary, Maharashtra State
Bank
Employees Federation, an affiliate of All India Bank
Employees'
Association (AIBEA), alleged that promoters of large defaulting
companies diverted bank loans into real estate
and floated cricket outfits for competing in domestic league
matches.




According to the bank employee union, over the past seven
years, there
are fresh bad loans worth Rs4.95 lakh crore only in PSBs,
while during
the same period, these lenders wrote off band debts worth
Rs1.4 lakh
crore. Top four defaulters of state-run banks constitute
Rs23,000 crore
of NPAs, the AIBEA said.



On 15 September 2010, Ispat shares soared in the
foolish hope of
a lender-blessed takeover, but fell immediately when the
company denied
as 'baseless' a report claiming that lending
institutions had
threatened to sell Ispat's debt-converted-to-equity to
rivals such as
Arcelor Mittal or Tata Steel. The Mittals claimed in a
statement that
"the lenders have reposed tremendous faith in the company
since its
incorporation"—a fact that ought to trigger a
full-fledged government
investigation.



This was just repetition of earlier scene. In July 2006,
when Ispat
wasn't repaying lenders, a media report said that ICICI
Bank wanted to
force Ispat's merger with Jindal Steel. At that time, it
was already
clear that the Mittals had squandered an excellent
opportunity to ride
the commodity boom and take advantage of the massive
write-offs granted
to all steel companies under what was to be a one-time CDR
exercise.
Within hours, the Mittals denied the report and the lenders
didn't
attempt to change the management either. Instead, they
quietly cleared
an unprecedented second CDR, which was officially disallowed
under the
Reserve Bank of India (RBI) rules unless it was accompanied
by a change
in management.



In the same year, the lenders watched silently as Ispat's
losses
continued to mount but the Mittals splurged 14 million Euros
to acquire a
Bulgarian football club.



Quoting business analyst and author Alam Srinivas from
Governance Now, the Hindustan Times,
said, "Instead of trying to get back their money lent to
Ispat, the
banks helped the promoters to continue their unviable
ways."



As on 30 June 2010, Ispat Industries owed over Rs7,200
crore to 15
lenders and had overdues exceeding Rs400 crore while its
consolidated
loss stood at Rs323 crore for a 15-month
period.



However, both Pramod and Vinod Mittal ran out of their luck
by the end of 2010. Three things sealed the fate of Ispat as it was taken over by
Sajjan Jindal-led JSW Steel.
Firstly, pressure from government agencies, especially the
Income Tax
department that conducted nationwide raids/searches on the
company and
its promoters. Secondly, lenders were under severe pressure
because they
would have to declare over Rs10,000 crore of outstanding
borrowings as
bad loans if some solution was not found before 31 March
2011. Also,
with the loan-for-share scam having badly burned lenders
such as Life
Insurance Corp of India (LIC) and LIC Housing Finance, even
the most
sympathetic lenders were scared to bend the rules for the
Mittal
brothers once again. Finally, Ispat was unable to pay
salaries and
utility bills and it was clear that any delay in selling the
plant would
have led to vandalisation and reduced
value.



Ispat Industries got their debt restructured in 2003 and
2009, with
promises to complete unfinished parts of their steel
projects and even
sell expensive flats.



Samar Halarnkar wrote in his article in Hindustan
Times, that
"In small towns, we found angry workers and rusting
factories, but the
owners led unchanging, caviar lifestyles. We found heated
swimming
pools, rooftop helipads, foreign homes, fast cars — and
humungous
loans."



"It was only in 2010, when the Mittal brothers asked
for another debt
restructuring that banks — after more than a decade of
throwing good
money after bad — forced them to sell the company. A year
later, in an
Istanbul palace, Pramod organised for his daughter one of
the biggest,
fattest Indian weddings the Turks had ever seen," the
report says.



In short, while lenders use all methods to recover dues
from aam admi
or the common man, when it comes to rich, influential and
resourceful
defaulters, there are different rules for extending the debt
line and
life.



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