The Chief Executive Officer (CEO) of Global Steel Holdings, Pramod Mittal, has dragged Nigeria to the International Court of Arbitration (ICA) over Federal Government's decision to renege on the sale of its largest iron and steel plant at Ajaokuta, Kogi State.
Pramod, the younger brother of London-based steel billionaire, Lakshmi, has invested $450 million (N53 billion) in the Ajaokuta Steel Company and National Iron Ore Mining Company over the past four years, making $192 million (N22 billion) as down-payment on stakes in them.
But Global and Nigerian officials have come to blows over the government's decision at the beginning of the month to confiscate the concessions Global had been awarded and pull out of the sale of the stakes.
Global is fighting the decisions and has now lodged a lawsuit at the arbitration court of the International Chamber of Commerce, the world's leading international arbitration body, to have the concessions reinstated and the sale completed.
Mittal told Independentonline of UK: “This is a very wrong decision. We have expended so much effort in restarting plants which have not operated for 20 years, if at all.”
In addition to cancelling the concessions and halting the sale, the Federal Government has accused Global of asset stripping and of borrowing almost $200 million from local banks by pledging the plants' assets.
Global denies both accusations.
"We are absolutely dismayed by these decisions from the new Federal Government.
"They have set alarm bells ringing throughout the global business community because it appears there is now in place a firm policy to confiscate all assets which have been bought in good faith by major businesses," a Mittal spokesman said.
The Mittal spokesman added that over the past three years, the company had invested at least $450 million in the Nigerian steel industry, employing 7,000 people.
The Ajaokuta Steel Company went from zero production when the Mittal group first became involved four years ago to producing one million tons of steel per year now.
Mittal claims the plant was due to be upgraded to produce five million tons a year.
The spokesman added: "We have improved these assets out of all recognition. We are appalled that anyone should suggest we have done anything improper."
He also said Global Steel Holdings had not taken out loans from Nigerian banks by pledging assets from the companies.
Global is not the only international company to experience difficulties since President Umaru Musa Yar'Adua was elected last year.
The new government has reversed sales of several state assets believed to favour business allies of former President Olusegun Obasanjo, including assets belonging to Shell, ExxonMobil and Chevron.
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