Mittal takes the rest of Nowa Huta Steelworks Poland
The global giant on Oct. 15 bought the remaining shares owned by the former Polskie Huty Stali government group, giving it 100 percent control of Poland’s largest steelworks in Krakow, Czestochowa, Katowice and Sosnowiec. The consortium, founded in 1976 in Calcutta, India, by Lakshmi Mittal, has owned the majority of the Nowa Huta group since 2003, when an agreement on the sale of the government-owned PHS shares was reached with the Polish Treasury Ministry.
At that time, Mittal bought the majority of Nowa Huta shares for 6 mln zloty (1.6 mln euro) and also agreed to cover 1.6 bln zloty in debts of the four steelworks and to invest another 2 bln zloty in their development.
An agreement on the takeover of the remaining state-owned shares in the PHS was reached in 2004. However, the price (1 zloty or 3.6 euro per share) was questioned by the Supreme Chamber of Control (NIK), an audit body controlling all state institutions. The NIK decision was proved right.
Now Mittal has agreed to pay 6.5 zloty per share to become the sole owner of the group. The government sold its remaining shares for 436 mln zloty.
According to the daily newspaper Gazeta Wyborcza, the Polish Treasury will earn 2 bln zloty on this year’s privatization deals, 1 bln less than planned. In 2005, the first year of the government led by the Law and Justice Party (PiS), the Treasury earned only 600 mln zloty.
Takeovers of public sector industries by private companies have been one of the most important changes in the Polish economy since communism collapsed in 1989. The most impressive year was 2000 when the state recorded 27.1 bln zloty from privatization.
Nowa Huta steelworks was one of the most important enterprises in Communist Poland after World War II.
An entire district of Krakow, initially a separate city with 200,000 inhabitants, was built to meet the housing needs of Nowa
At its peak, the steelworks named after Soviet Communist leader Lenin employed 40,000 people and produced 7 mln tons of steel a year.
As the steel industry slumped in the 80s, both numbers went down. Now the steelworks has no more than 10,000 workers, and this is expected to continue decreasing.
One thought on “Mittal takes the rest of Nowa Huta Steelworks Poland”
There is an INTRICATE,CAUSATIVE AND FUNDAMENTAL LINK between Politicians and Money Launderers and Industry ! That also explains Y Politicians love the mining,steel and sugar industry in Pakistan and all over the world – including to Hindoosthan.
Several Indian Industries are designed for black money generation and money laundering ! dindooohindoo
The INDIAN Steel unit is an IDEAL MODE OF RAISING CASH and MONEY LAUNDERING w/o limit ,even w/o mining activities – and the same MODUS OPERANDI applies to Pakistan also
• Steel was subject to ED (Excjse Duty), which is a MODVAT able tax
• In a 20 million tons steel plant,2-3 % of production can be explained to the state as wastages, yields, input mix issues,variation in power factor ,deviations in material quality,vagaries of supply chain,production mix etc.
o 2% of 20 million tons is 5,00,000 tons,and the steel unit will NOT record that production in the logs and that production will be met from CPP and not from Grid Power (as power is a proxy for output).This production will be sold OFF the books
• If 4-5,00,000 tons of steel, is sold in cash – there is enough cash generated by the steel unit – and the steel is sold, free of VAT, to a user,who does not need VATABLE steel (as his product is VAT exempt or his supply chain is financed by cash)
o If inputs are bought in cash,then more and more steel can be sold, in cash –as the sales HAVE TO BE OFF THE BOOKS OF ACCOUNTS
The Steel unit makes the ED/GST invoice of the 5,00,000 tons of steel,for steel which has been sold already in cash (This is a paper sale – there is no movement of steel)
o THE ED/GST invoice (of the 500000 tons) is then sold by the steel unit,to a steel user, WHO CAN AVAIL OF THE VAT BENEFIT – AT SAY,40% OF THE VALUE OF THE VAT/GST INVOICE
THIS STEEL USER IS ACTUALLY USING STEEL BOUGHT IN CASH (but in the past he has recorded some steel product sale, like say a steel gate, in the books as a ED/VATable sale.TO OFFSET the VAT on that Sale – the steel user is BUYING this ED/VAT invoice from the Steel maker).If the steel user is buying a VAT component in an invoice of Rs 1 crore at 40%, he is paying Rs 40 lacs and using Rs 1 crore VAT credit to offset from HIS VAT LIABILITY – A super profit business ! Buying and Selling Paper)
• THE STEEL USER MAKES A WIRE TO THE STEEL MILL, AND THE STEEL MILLS PAYS THE CASH TO THE STEEL USER, FOR THE BASIC STEEL PRICE BILLED
• THE CASH PAID TO THE STEEL USER BY THE STEEL MILL, IS GENERATED FROM THE 500,000 TONS OF STEEL, SOLD IN CASH
o THIS SYSTEM OF TRADING IN CASH AND TRADING IN GST AND TDS INVOICES, IS A METHODOLOGY DEVELOPED BY MARWARIS, AND THE TAX POLICIES OF THE STATE, HAVE BEEN MADE, TO ALLOW AND PERPETUATE THESE METHODOLOGIES
Which is Y the Indians are in the Polish Steel !