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Pramod Mittal, chairman of Global Steel Holdings Ltd (GSHL), is effectively getting a helping hand — and a possible way out of financial distress — from Nigerian taxpayers, Bloomberg is reporting.
GSHL, with headquarters in the United Arab Emirates (UAE), entered the Nigerian steel industry in 2004, acquiring five major concessions and share purchase contracts, during the Olusegun Obasanjo administration.
The agreement included an arrangement to first manage and later buy the Ajaokuta Steel Company Limited.
However, the contracts were revoked in 2008 after the federal government accused the firm of asset stripping.
In 2013, Smart Adeyemi, a lawmaker from Kogi state, had said the Goodluck Jonathan administration — which was in power at the time — recovered the Ajaokuta steel mill “without any attendant financial obligation whatsoever”.
Years later, after the Muhammadu Buhari administration took over in 2016, the federal government approved the execution of the modified concession agreement with Global Steel, which allowed the foreign firm to retain the Nigerian Iron Ore Mining Company (NIOMCO) in Itakpe.
Three years later, the Buhari administration reportedly backed out of the agreement, leading to a legal battle involving both parties.
In September 2022, Malami announced that the federal government had finally resolved the “long-standing contractual dispute” with Global Steel over the Ajaokuta Steel Company Limited (ASCL) and the NIOMCO concessions.
Malami was said to have modified the terms of the deal to take back the mining firm and award a payment — raising questions as to why the federal government decided to pay the settlement claim shrouded in controversy.
He said instead of paying the original claim of $5.258 billion by GSHL over the termination of the concessions by the Olusegun Obasanjo administration, Nigeria had secured a 91 percent reduction and would pay $496 million only.
Malami would later be questioned over five suspicious deals, including the $496 million payment.
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