•For the record, regarding detention in Bosnia of Mr. Pramod Mittal, Chairman of the Supervisory Board, Mr. Rajib Das, Member of the Supervisory Board and Mr. Paramesh Bhattacharyya, Managing Director/General Director of GIKIL.
Mumbai, 3 August, 2019 (GPN) : The events outlined below amount to a collusion in Global Ispat Koksna Industrija d.o.o (GIKIL) Bosnia with the objective of hostile takeover by dislodging the present management and causing loss of value for its stakeholders and their investments. A lawyer, who represented the company for the last six years, and who was removed from the Company, filed a complaint on 17th July, together with four employees, who were also removed from the Company, for bad conduct, filed complaints on 22nd July morning, with the office of the Prosecutor, against the management and supervisory board members. These complaints are categorically false in nature.
On 23rd July morning, the police visited the company and took away the mobile devices, laptops etc. of Mr. Pramod Mittal, Mr. Rajib Das and Mr. Paramesh Bhattacharyya. Despite asking for an interpreter, one was not provided. This conduct was a complete violation of both the United Nations human rights treaties and of the European Convention on Human Rights. These violations pose a threat to foreign investment and undermine foreign investment treaties to which Bosnia is a party.
Surprisingly, the local media published the news one hour before the police visited the Company at 1.00 pm, whilst the order of the judge was passed only at 2.00 pm on 23rd July. This happened despite the fact that the United Nations directs police forces to exercise confidentiality and care in the handling of sensitive information at all times during any of their investigations, as well as that a court order should be sought before any search.
Since GSHL took over the management of GIKIL, over 14 years ago, the Supervisory Board (SB) of the company was jointly managed with a local company, KHK. KHK is owned by the Government of Bosnia, whilst SB nominations are made by the Government of Tuzla canton. These included important persons, such as the former Prime Minister and member/s of the Government. All decisions at GIKIL were always taken jointly, and no individual decision was ever taken by Mr. Mittal. The balance sheet of GIKIL has always been annually audited by an independent agency and presented to the SB of the Company by the Management Board (MB) for its approval, which, SB then signs, subject to the approval of Shareholders, jointly represented by the nominees of the Government of Tuzla canton. The nominees of the Government attended the SB meetings as and when these were convened. No meeting can ever be held unless both sides are represented and quorate.
The members of the Management Board (MB) consist of one Indian person and three local (Bosnian) persons. The day-to-day operations of GIKIL are being handled by MB members. SB has no role to play in this at all. All compliances were carried out as per the regulatory requirements. All activities were fulfilled with due approval and legal opinion as per the provisions of the law of the land, which were verified time and again by various agencies and the Company has extended full cooperation to them for such verifications as and when required. SB has always insisted that the best management standards and practises are maintained at all times. Nothing wrongful was ever carried out, whilst well-maintained transparency under the law of the land was assured at all times.
All allegations made in the local media are entirely defamatory and incorrect. These allegations were made by persons either unfamiliar with the subject matter and/or those who wanted to dislodge the management of the Company at any cost, including without consideration to the livelihood of the families of over 1,000 employees of GIKIL.
For the complete clarity and the avoidance of any doubt:
1. GSHL has thus far invested more than USD 32 Million in GIKIL and spent substantial additional amounts indirectly to develop and implement world class business practices in GIKIL. Against this background, any hear-say that it might have conducted any fraudulent activity to the value of approximately USD 12 million only is derisory and absurd.
2. The collusion to dislodge the Company’s management was carried out with the intention of damaging the reputation of GIKIL in BiH and abroad, where the Company has a value in excess of USD 100 million, reduce this to nothing and aid and abate a hostile take-over attempt.
3. The spread of falsehoods and derision fails to prove the facts in evidence, namely that Mr. Mittal’s credibility stands tall with the settlement of USD 372 million debt to STC in India. It is, against this background, contemptable and absurd to suggest any involvement with any fraudulent financial transaction to the tune of only USD 12 million.
4. To show Mr. Mittal’s and GSHL’s full confidence in a complete and total exoneration, EUR 12.5 million has been deposited with a court escrow account; this should encourage a fair and impartial investigation that evidences full compliance.
5. Last, but not least, any foreign transactions made have required statutory charges to be paid at the time of transaction and after obtaining the approval from the respective authority in respect of the authenticity of the transaction. Facts can simply not be re-written by hear-say and falsehoods.
The detention as carried out was thereby illegal because it was disproportionate to evidence by hear-say. The United Nations human rights treaties are clear in this regard, including inter alia: 1. No one shall be subjected to arbitrary arrest or detention; 2. Detention pending trial shall be the exception rather than the rule; 3. Where necessary, an interpreter shall be provided. The activities, as carried out, were thus flagrantly contrary to the law and will be vigorously responded to in court. In the process, and as always been the case, we will afford complete cooperation to the Government authorities.
All alleged payments were made as per the contract which was entered by the Management Board and not by the Supervisory Board. All payments have been approved by the Management Board after obtaining approval from the Ministry of Finance of the Government and after detailed examining of the respective Agreement as and when required in accordance with the law.
We request the Government of BiH to respect foreign investment treaties and vigorously maintain the human rights of any foreign national in Bosnia. Any queries should have been raised with the Management Board and not with the Supervisory Board. Management Board members are available at all times. In the event of dispute amongst Shareholders, this should be strictly settled under arbitration as per the joining contract and should not fall under the scope of the office of the Prosecutor. It has always been understood that the role of SB is to support the best management practices.
FOR FURTHER INFORMATION CONTACT : Alok Gupta – [email protected]
