Balasore Alloys’ assets seized

Balasore Alloys has seen its assets frozen, according to India’s Business Standard. “The Enforcement Directorate (ED) has seized immovable assets, worth Rs 244.89 crore, of Balasore Alloys Ltd whose shareholders are Global Steel Holding Ltd (GSHL) and its chairman Pramod Kumar Mittal who are being probed for defrauding the State Trading Corporation of Rs 2,112 crore, a statement said on Saturday.
“The agency seized Balasore Alloys’s property in which Mittal and GSHL are holding 30.35% shareholding through various Indian and foreign promoter and investment companies under the Prevention of Money Laundering Act.
‘Mittal and GSHL’s share in Balasore Alloys includes building, plant and machinery totalling approximately Rs 244.89 crore which has been attached in lieu of the proceeds of crime,’ an ED statement said.
The ED filed a money laundering case on Mar. 29 against Mittal, GSHL and State Trading Corporation (STC) officials following an FIR registered by the Central Bureau of Investigation on Mar. 16.
“In its investigation, the CBI found that GSHL had sought a financing facility from the STC which agreed to finance the company without checking its financial condition.
“GSHL availed financing facility for purchase of raw material for their Philippines-based steel plants on cash and carry basis. As per the agreement, raw material and goods had to be lifted only upon payments to STC whereas raw material was supplied despite payments not being made.
“‘Thus, GSHL was favored by violating Reserve Bank of India guidelines, and STC exposed itself to financial risk despite default in payment from the associates continued the transactions. The total default mounted up to Rs 2,112 crore approximately,’ the statement said.
“Mittal is alleged of committing criminal breach of trust as he failed to make payments as per terms and conditions of the agreement with STC.
Despite irregular payments and piling up of credit, STC officials allegedly renewed line of credit to the company while the cheques given by GSHL and its Philippines-based subsidiary to STC were allegedly dishonored resulting in loss of Rs 2,112 crore to the public sector undertaking.”

Balasore has five furnaces with total capacity of 57 MVA to produce 95,000 mtpy of most high high-carbon ferrochrome lumpy, chips and fines. This would be the second Indian ferrochrome producer to caught in a financial mess.

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