Economic Insight-Prosecutor General\'s case against ArcelorMittal loses ground

ArcelorMittal Kryviy Rih stated in a press release today that the Prosecutor General\'s Office of Ukraine (PGO) lost ground in its claim to cancel an additional agreement made between the State Property Fund of Ukraine (SPF) and ArcelorMittal on the purchase by the latter of Kryvorizhstal (now called ArcelorMittal Kryviy Rih) in 2005, after the Ukrainian government representative did not support the claim on the court session held on 5 October, 2010.

In July 2010, the PGO filed a lawsuit against the SPF and ArcelorMittal to cancel amendments to the purchase agreement, which were agreed upon between the SPF and ArcelorMittal in 2009 in order to postpone fulfillment of some investment liabilities during the period of the financial crisis. The PGO questioned the legality of the additional agreement, as it was not approved by the Ukrainian government at the time. ArcelorMittal expressed concern about possible attempts by government lobbyists to reprivatise Kryvorizhstal, bringing to attention breaches of procedure as well as both Ukrainian and international legislation regarding the matter, and suspecting interests of business, not the state, behind the case.

The key owner of ArcelorMittal, Lakshmi Mittal stated in turn that he is satisfied with the good relations his company is enjoying with the new Ukrainian government, and that he hopes this case will be solved in his company\'s favor.

In September, the PGO\'s action against ArcelorMittal was accompanied by the State Customs Service of Ukraine, accusing ArcelorMittal Kryviy Rih of avoiding paying customs duties on imported coking coal. The entire lot of coking coal, which accounts for approximately 18-24% of the company\'s monthly production needs, was seized.