The Hindu : Business : India takes up Mittal bid with EU

Online edition of India's National Newspaper
Thursday, Feb 16, 2006

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Business

India takes up Mittal bid with EU

Special Correspondent

`National treatment not meted out to investment'

NEW DELHI: The takeover bid by steel magnate Laxmi Mittal for the Luxembourg-based Arcelor has assumed a new dimension with India warning the European Commission (EC) that opposition to the bid violates norms of the World Trade Organisation (WTO).

In a letter to the European Union's Trade Commissioner, Peter Mandelson, the Union Commerce and Industry Minister, Kamal Nath, has argued that trying to prevent the acquisition means that national treatment was not being given to cross-border investments.

Mr. Kamal Nath referred to the fact that the EU had made a commitment to the WTO to accord national treatment for cross-border investment. In fact, the EU had made a request to India that this sort of treatment should be provided on a reciprocal basis. He pointed out in the letter that this did not seem to be happening in "letter and spirit". Noting that the EU's attitude impinged on the ongoing WTO services negotiations, he said "we view it with serious concern".

He did not seek to discuss allegations of racism being made over this takeover bid in Europe, but felt that the issue of national treatment for cross-border investment was not related either to the passport or colour of a person.

The Commerce Minister is also believed to have written a letter on this issue to the Prime Minister, Manmohan Singh, highlighting all aspects of the case, so that it can be taken up during the forthcoming visit of the French President, Jacques Chirac.

The entire controversy has stemmed from the $22.3 billion bid being made by Mittal Steel for acquiring Arcelor which has evoked strong reactions from the government of France, Luxembourg and Spain. This is despite assurances given by Mr. Mittal that there will be no job losses as a result of the takeover.

Mittal Steel's net drops

Reuters, PTI report:

LONDON: Mittal Steel said on Wednesday that it had met up to 40 per cent of the Arcelor's shareholders and had got a `positive response' to Mittla's bid, the company's Finance Director, Aditya Mittal, told Reuters.

Mittal Steel on Wednesday announced a 28.4 per cent drop in its net income of $3.365 billion in 2005 compared with $4.7 billion last year.

However, the net income in the fourth quarter rose 36 per cent compared with the previous quarter, higher than the market expected, it announced.

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