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Row over Blair's `favour' to Indian tycoon
By Hasan Suroor
LONDON, FEB. 10. Even as the Hindujas' passport affair continues to dog the Blair Government, a new controversy, largely prompted by conjecture and inference, has erupted - this time involving the Indian steel magnate Lakshmi Mittal, known as Britain's richest Asian, and like many businessmen a generous donor to the ruling Labour Party.
It has been alleged, amid strong official denials, that the Prime Minister, Tony Blair, personally intervened to help Mr. Mittal's LNM Holdings buy a Romanian steel company as a favour for his 1,25,000 pound-donation to the Labour Party last year. The donation, it is stated, was made in June while Mr. Mittal was in the thick of protracted negotiations with the Romanian Government for the purchase of the country's biggest state-owned steel company Sidex.
Less than a month after the donation was made, Mr. Blair wrote to the Romanian Prime Minister, Adrian Nastaste, expressing his ``delight'' over the imminent deal and suggesting that it would improve Romania's prospects of joining the European Union. He incorrectly described LNM Holdings as a ``British company'', which, in fact, is reported to be registered in a Caribbean island.
The deal, for which Mr. Mittal paid 37 million pounds, was signed at a high-profile function in London in November, attended among others by the Industry Secretary, Patricia Hewitt. Downing Street confirmed the letter, but said the Prime Minister ``frequently'' wrote to foreign governments when British companies won contracts abroad. ``...it is entirely appropriate for him to do so,'' a spokesperson was quoted as saying, pointing out that the letter was written after the contract was concluded, and the Prime Minister did so on the advice of the Foreign Office.
A spokesperson for LNM group strongly denied any link between Mr. Mittal's donation and the Sidex deal. ``The donation had no bearing on the deal which was done directly between LNM Holdings and APAPs, the Romanian agency on privatisation,'' said Annanya Sarin. She said there was nothing unusual about Mr. Blair's letter and ``many governments including India'' had expressed their ``pleasure'' at the deal as it was the largest and most important privatisation agreement signed by Romania. She described media reports alleging a ``Mittalgate'' as ``absurd'' and without any basis.
Asked whether it was correct to describe LNM Holdings as a ``British'' company, she said it was based in the U.K. and had corporate offices in London. She refuted the charge that Mr. Blair had backed a ``foreign'' company such as LNM Holdings even though it was in competition with the ailing domestic steel industry, which had been shedding thousands of jobs.
Media reports quoted a senior Welsh political leader as demanding an explanation from the Government for backing a ``foreign registered company'' and ``undermining'' local jobs. He particularly referred to Corus - formerly British Steel - which has laid off 6,000 workers in the past one year. Mr. Mittal's contribution to British economy and the job market was also questioned.
Sunday papers played up the story as yet ``another case'' of Labour dishing out ``favours-for-cash.'' The former Tory chairman, Michael Ancram, demanded a ``full inquiry''.
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Hindujas deny reports
LONDON, FEB. 10. Hindujas today denied reports in the British media that the reopening of the inquiry into the passport affairs of their group chairman, S. P. Hinduja, could backfire on the Prime Minister, Tony Blair.
Referring to the report in the Sunday Observer that the Hindujas want to give evidence that could provide potentially devastating details of their relationship with Downing Street and government departments, a spokesman of the group said there was no truth in the report attributed to sources close to the Hinduja brothers. - PTI
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