Pramod Mittal’s woes relating to his bankruptcy case continues to play out in the courtrooms of London close to three years after he was declared bankrupt on 19 June 2020.
The younger brother of steel magnate Lakshmi Mittal is now being pursued to have the discharge of his bankruptcy suspended. In the UK, a person declared bankrupt is automatically discharged from bankruptcy 12 months later, unless there is a court order.
On June 10, 2021, Paul Allen, the trustee appointed to realise Mittal’s assets to pay off the creditors, filed an urgent application in the court to suspend the automatic discharge of Mittal from bankruptcy, citing non-cooperation and abject failure to comply with statutory duties. On June 17, 2021, the court granted an interim suspension order pending full hearing.
After getting two extensions, Mittal submitted his evidence in August 2021 following which the final hearing was held on November 10 and 19, 2021, before Deputy Insolvency and Companies Court (ICC) Judge Agnello. Mittal did not dispute the contention that he had failed to cooperate with the Trustee but argued that the case be dismissed on a technical point, that the Trustee had “failed to serve the Application and evidence within time before the 17 June 2021 hearing.”
The judge accepted that there was a compelling case for the suspension of the discharge of bankruptcy due to Mittal’s conduct, but because of a technical breach of rules, she had to rule in Mittal’s favour. It is this judgment by Deputy ICC Judge Agnello dated 1 April 2022, that the Trustee has now appealed.
As a result, arguments between the counsels, Tony Beswetherick for the Trustee and Adam Chichester-Clark for Mittal, have revolved around the chain of events relating to the servicing of documents between the solicitors, on which there is a broad agreement, but sharply differing interpretations. Changed postal address, undelivered courier, mimecast platform, and email trails are at the heart of this appeal rather than terms like asset realisation, debt servicing, hidden assets, creditors list that one usually associates in cases of bankruptcy.
“My learned friend says we have relied upon a technical breach, but the point is that this part is technical and there are very good reasons for that,” said Chichester-Clark, even as Beswetherick countered that Mittal should not have been granted the discharge.
Once a person is discharged from the bankruptcy, they can act as a company director and any assets they make after the discharge is not used to pay creditors under the existing bankruptcy. So, there is a clear advantage in coming off the insolvency register.
However, as the appeal is still to be decided, Mittal continues to be on the insolvency register. But Mittal’s travails are not limited to this particular (service of Application) appeal. In November 2022, Moneycontrol had reported that the high court had revoked his proposal to pay just 0.18 percent of his £2.5 billion debt to creditors. Mittal had drawn up an individual voluntary arrangement (IVA) with the creditors in October 2020, which was found to have “material irregularities” leading to its revocation.
Moorgate Industries Limited, the principal debtor on whose petition Mittal was declared bankrupt for an outstanding debt of £140 million, had alleged that the IVA was approved using sham creditors. This had increased the number of creditors and the amount of debt, which was detrimental to the interest of genuine debtors like Moorgate, who was outnumbered during the IVA approval vote. Mittal had sought to appeal the IVA judgment for which permission was denied in December 2022.
For over two years, from October 2020 to December 2022 till the time the IVA was in place, Mittal had escaped from being investigated about his assets and conduct. That is because once a declared bankrupt person gets an IVA approved from his creditors, which includes a payment plan, he enjoys protection against being further investigated by Trustee or harassed by creditors. In Mittal’s case, Moorgate’s petition got his IVA revoked which has potentially exposed him to a forensic examination of his assets.
Last month, Mittal was charged in Bosnia with organised crime and abuse of office while he was a co-owner of a coke plant. He faces allegations of siphoning $12 million from the plant which he co-owned with the local government. Mittal and few of his employees were arrested in 2019 in Bosnia and were let off on bail.
Former chairperson of Ispat Industries, Pramod Mittal also helmed Global Steel Holdings Ltd (GSHI) and Global Steel Philippines Inc.
In London, Mittal lives in a palatial home in Mayfair, but claims to have assets worth only £150,000. He maintains he is being supported by his close family members including his wife, father, son, and brother-in-law.
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