- Wednesday, March 29, 2023
He was declared bankrupt in June 2020.
By: Pramod Thomas
The younger brother of steel magnate Lakshmi Mittal was accused of being unreasonable and obstructive by a UK judge, according to a report.
Insolvency and Companies Court Judge Briggs on Monday (19) denied permission to allow Pramod Mittal, 66, to appeal the revocation of his individual voluntary arrangement (IVA), the Times of India reported.
The judge also refused him permission to stay the IVA revocation pending any appeal in the Court of Appeal as it had ‘material irregularities’.
“The conduct of Mittal has caused a considerable amount of expense. His behaviour has been unreasonable as he has challenged each step of way,” Briggs was quoted as saying by the newspaper.
An Individual Voluntary Arrangement (IVA) is an agreement with creditors to pay all or part of debts. Under IVA, a person agrees to make regular payments to an insolvency practitioner, who will divide the money between creditors. An IVA gives more control of assets to promoters than bankruptcy.
Mittal entered into an IVA with his creditors in October 2020. In November, a London court overturned his plan to pay 0.2 per cent of his total debts of more than $2bn.
He was declared bankrupt in June 2020 over an approximately $170 million debt owed to Moorgate Industries UK Limited, previously called Stemcor UK Limited.
With the recent court order, the trustee in bankruptcy, Paul Allen, of FRP Advisory, can go back to investigate Mittal’s assets.
Moorgate Industries UK seeks a court order to recover $169 million plus interest from Mittal.
None of Mittal’s assets have been realised thus far as his bankruptcy was stayed pending the IVA challenge.
Briggs also made an order that Mittal should pay all of Moorgate’s costs for the IVA challenge hearing of more than $600,000. However, Mittal had disputed the costs, saying they were exorbitant.
Last month, Joseph Curl, representing Moorgate, said in court documents filed earlier this month that Mittal’s debts increased by a factor of more than 40 to almost $2.7 billion shortly before creditors voted on the IVA proposal.
Curl said loans to four of Mittal’s creditors carried “absolutely extraordinary” rates of compound interest, with interest making up more than 97% of his total debt.
Mittal’s lawyers argued Moorgate did not have any evidence to support its case that the loans were a “sham” or that they were created for a “fraudulent purpose”.
(with Reuters inputs)
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