Billionaire steel magnate Lakshmi Mittal’s younger brother Pramod Mittal was due to be automatically freed from bankruptcy in Britain on Wednesday but has had his bankruptcy suddenly extended by the London high court for failing to cooperate with the bankruptcy trustee.
Mittal, 65, an Indian citizen, whose brother is one of the richest men in the world, was declared bankrupt by the high court on June 19, 2020 after failing to settle a judgment debt against him of 139 million pounds (Rs 1,433 crore), which led to Moorgate Industries UK, to whom he owes the debt, presenting the bankruptcy petition.
In the UK, a person who has been made bankrupt is automatically discharged from bankruptcy restrictions 12 months after the bankruptcy order was made. In Mittal’s case, that was due to be June 23, 2021. But Paul Allen of specialist business advisory firm FRP, who was appointed as trustee in the bankruptcy of Mittal, took Mittal to the insolvency and companies court last week seeking suspension of his discharge.
The Insolvency Service confirmed to TOI: “An interim suspension of discharge order for Pramod Mittal was made in the high court on June 17. A final hearing for the suspension of discharge will be heard after October 4, 2021. Pramod Mittal remains subject to bankruptcy restrictions. The Individual Insolvency Register will be updated in due course, following receipt of the order from the high court.”
The focus of the trustee in bankruptcy is to realise the assets of the estate and distribute those realisations to its proven creditors. Bankrupt individuals must co-operate with the trustee and provide them with the information they ask for.
One of the grounds for Mitttal’s discharge being suspended was that he had failed to cooperate with the trustee, TOI understands.
Mittal successfully got an Individual Voluntary Arrangement (IVA) approved by 75% of the value of the creditors at a meeting on October 26, 2020, in which he offered to pay back 4.4 million pounds (Rs 45 crore), after costs, of the 2.5 billion pounds (Rs 25,000 crore) he owes to 20 creditors, with the help of a 4.7-million-pound (Rs 48-crore) contribution from his son, Divyesh. The creditors include his wife Sangeeta, son Divyesh, father Mohan Lal and nephew Amit Lohia. He declared in the IVA proposal that his total assets amount to just 115,669 pounds (Rs 1.1 crore).
Source: Economic Times