LONDON, FEB. 13. In a new twist to the Mittal ``affair'', questions were raised today about the timing of the Prime Minister, Tony Blair's intervention on behalf of the U.K.-based Indian industrialist, Lakshmi Mittal, whose LNM Holdings purchased Romania's ailing steel giant, Sidex, in a multi-million pound deal last year.
Even as Mr. Mittal's aides and the Government continued to maintain that the deal had already been finalised by the time Mr. Blair came on the scene, reports today claimed that the timing of his letter to his Romanian counterpart in connection with the deal was ``crucial''.
It was stated that the letter in which he praised the Romanian Government for backing a ``British'' company arrived when Bucharest was still weighing its options vis-a-vis LNM Holdings and a French company, Usinor.
Bucharest reportedly wanted to make sure that LNM Holdings was indeed a British company rather than simply a ``post office box'' operation, as one newspaper put it, and Mr. Blair's letter cleared that doubt.
It quoted the Romanian Prime Minister, Adrian Nastase, as saying that he had been ``reassured by Britain's guarantees''. ``The contents of Mr. Blair's letter appear to have represented a distinct favour for the Indian businessman, who had recently donated 1,25,000 pounds to Labour's election victory. It contained the false statement that his LNM Group was a British company,'' The Guardian said in a front- page story today.
It claimed that the deal had effectively been shelved and got revived following Mr. Blair's letter in which he said he was ``delighted'' that ``it is a British company which is your partner''. A spokesperson for LNM Group, however, denied the report saying it was ``factually incorrect'' on almost every count.
``The signing ceremony was postponed from July 20 to July 25, 2001, not because the deal had been shelved but because of the Romanian's Prime Minister's other engagements,'' Annanya Sarin told The Hindu.
She said the French company, Usinor, ``never bid'' for the contract, and LNM Holdings was the ``only qualified bidder''. She also maintained that LNM was a British operation and had ``corporate presence'' in Britain.
The Romanian Government in a statement said the entire process relating to the privatisation of Sidex was carried out in a ``transparent manner, according to legal procedures as well as international norms for the sale of assets to foreign investors''.
It confirmed that the evaluation of offers had been finalised before Mr. Blair's letter arrived. It described the letter as a ``gesture'' by Mr. Blair to ``salute one of the most important privatisations in southeast Europe''.
The Opposition, however, insisted on an inquiry to clear the air.
The shadow Foreign Secretary, Michael Ancram, wanted the Government to justify Mr. Blair's letter to the Romanian Prime Minister, and asked whether it was commonplace for him to write such letters.
Another Opposition leader, Adam Price, said:``I think the Government has to come forward with far better reasons for its interest in the case.''
