Pramod (64) was made bankrupt by the Insolvency and Companies List on June 23 after a bankruptcy petition was filed against him by Moorgate Industries (UK) Ltd.
Despite Lakshmi being the 10th richest person in India, worth $10.3 billion (Rs 75,889 crore), and ranked 91 among the world’s richest, Pramod, who lives near Hyde Park, failed to settle a judgment debt of $166 million (Rs 1,223 crore) against him in the commercial court of the high court.
Mittal was jointly and severally liable for the judgment debt with Isle of Man registered company Global Steel Holdings Ltd. Both had acted as guarantors for the debts of Global Ispat Koksna Industrija Lukavac, a Bosnian producer of coke, which is used in making steel.
The bankruptcy petition for £139 million (Rs 1,340 crore) was presented by Moorgate against Mittal, and on June 19 this year insolvency and companies court judge Catherine Burton made the bankruptcy order, saying “Mr Mittal’s evidence does not persuade me that there is a reasonable prospect of the petition debt being paid in full within a reasonable period of time”.
Pramod, who lives near Hyde Park, had sought to adjourn the hearing by several weeks to give him time to settle the debt.
He had claimed he might be set to benefit from a payout of tens of millions from a Nigerian dispute that has been going on since 2008. That dispute involves GN, a Nigerian company, 75% of which is owned by a Mittal family trust.
He said that GN had agreed to make a settlement payment to Moorgate out of whatever money it receives from the mediation provided that he had not been made bankrupt, and provided that Moorgate agrees to accept the sum in full and final settlement of the petition debt, and all other claims it may have against him. Moorgate was invited to sign a confidentiality agreement as a prerequisite to receiving more information about the mediation. Moorgate failed to respond.
Pramod also used the example of Vijay Mallya, who is also subject to a bankruptcy petition brought by a consortium of Indian banks. Mallya managed to get his bankruptcy petition adjourned by at least six months in the same court. “The circumstances which he considered to weigh heavily in favour of the adjournment included allowing a period of time for petitions before the Supreme Court in India and a settlement proposal before the Karnataka high court to be determined,” Barton wrote in her judgment.
“Distilling the principles set out in the judgment in Mallya, there must be a reasonable prospect of the petition debt being paid in full; within a reasonable period; and with credible evidence to support such a prospect. In my judgment, in this case, none of the criteria is satisfied,” she wrote.