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15,000 employees of Sidex Galati thrown into unknown. EvZ-Capital investigation

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Nothing is clear about the Gupta family's past business with various authorities and private firms in Romania. The Indians, who are now on the brink of taking over Sidex Galaţi, a city-like plant, have managed to "hypnotize" everyone, but now, Sanjeev, the head of the family, worries even the great international analysts who ask themselves if the "steel man" does have “clay legs” in reality.

Over 15,000 Romanians are caught in the middle in a combination with which they should have no connection with. They and their families, perhaps more than 50,000 people, are part of a business imposed by Brussels bureaucracy and initiated in the misty financial world of London and Mumbai, India.

The Sidex plant in Galati, the farthest steel mill on NATO Eastern border, with more than 15,000 employees, has to be sold because its owner, Arcelor Mittal, has become too big for the taste of European bureaucrats. Mittal, one of the richest people in India, has to sell Galaţi because he wants to buy a plant in Italy, and European authorities say that if he keeps them both would become too big enough to threaten the fair competition on the market. And he found a buyer.

Another big family in India, the Gupta family. Merchants of anything, they have stand out in recent years, through spectacular metallurgical plants acquisitions, funded with huge loans, some of which have already been questioned. Capital and Evenimentul Zilei have already begun a series of investigations into the Gupta family business, which has been "sniffing" Romania for nearly 20 years, without leaving anything remarkable behind, except for promises as large as Sanjeev Gupta's reputation, the main man of Liberty House, the contender for Galaţi plant.

We have shown how they created big issues to a Swiss investment fund, whose money they invested in these bold businesses. We have shown how they lost credibility, including in India, their home country, and most importantly, we have shown how they promised 200 million euros in steel and ship investments in Oltenita and ended up managing 28 hectares of land bought not clearly how, a silo and two plantations of lavender and goji.

Now is the time to present the authorities' replies to Gupta's family history and intentions, as well as a new episode of what has already become a trend in the international financial press: telenovela "the Gupta road to nowhere". The European Commission is getting involved, but it does not get involved As we said at the beginning of the material, the source of the transaction between the Mittal family (Arcelor Mittal) and the Gupta family (Liberty House) for the Galati plant is the Brussels bureaucracy.

More specifically, the European Commission and its competition authority, which has decided that Arcelor Mittal can not buy the Italian Ilva (which Mittal hardly wants it) without divesting part of its other assets in Europe. This situation exists as the European Commission considers Arcelor Mittal would become to big to ensure a fair competition game in the European steel industry. And Mittal, present in several countries in the Union, chose to give up Sidex Galaţi, amongst aother plants.

This is what the representatives of the European Commission told us in a short answer to a few long questions that I have sent. "The decision to renounce the Galati steel works belonged exclusively to Arcelor Mittal. This measure is part of the commitments that the company has taken to ensure the legality of Ilva's acquisition.

It is also the exclusive attribute of Arcelor Mittal, the choice of the buyer for the Galati steel mill, "the representatives of the European Commission have told us. However, even if, as is normal, the current owner of Sidex is free to decide who he sells to, the same European rules say it is not necessary to find a questionable buyer, whose ability to keep promises are raising questions.

And the European Commission promises to watch over this. "Our role, to date, is to analyze how fit is the buyer chosen by Arcelor Mittal. The analysis procedure is undergoing and that is why it is too early to comment on the possible conclusions the Commission will draw”, the European Commission said. Very important, until the Commission takes a decision, everything that happens in Galaţi is the exclusive responsibility of Mittal as if the Commission were to reject the sale to the Gupta family.

These are the only responses handed over by the European Commission to Capital and Evenimentul Zilei, although our questions covered a much wider area.

Here they are: - How can the European Commission ensure that the promises in Galaţi are real this time?

- Can European authorities force the buyer to corporate transparency, given the strategic importance of this acquisition?

- How can the European Commission safeguard the soundness of the investment, bearing in mind that the Gupta Group has a high degree of indebtedness and access to financing seems problematic?

- How can the European Commission ensure the buyer's ability to ensure uninterrupted production in the event of deterioration in market conditions?

- Can the European Commission validate Gupta's ability to deliver the investment plan to 50% increase in production capacity and restart a furnace?

If this plan is unsuccessful, does the plant close? Nothing in the steel industry, just trading and scented lavender land. Are the Romanian authorities hiding something? Almost 20 years have passed since the Gupta family arrived in Romania. It is almost not so important that the head of family, Sanjeev, now tries to say, hypocritically and predictably, that he has no idea about the businesses his brother has been doing in Romania.

Importantly, since 1999, the Gupta family has done nothing remarkable. It had a minimum of four employees and a maximum of 50, which is registered for only two years. Moreover, according to the answers provided by Capital and EVZ by the current Authority for the Administration of State Assets (AAAS), the former Authority for State Assets Recovery (AVAS), the Indians did not even buy a metallurgical business in Oltenita in the true sense of word and no shipyard, as they argued.

All they took was the land, then turned it into arable land and space for silos. In particular, quoted by Capital and EVZ in connection with the privatization of Turol (the former metallurgical plant Oltenita) and Navol (the former shipyard), AAAS does not mention a word about Transdanube or Evergreen, those companies who have taken possession of the land and facilities of the two companies.

Even though Transdanube and Evergreen, both controlled by the Gupta family, are known in Oltenita as the owners of the two companies, in which they promised to invest over 200 million euros. If it does not hide anything, AAAS indicates that both Turol and Navol have gone through failed privatization processes with investors in Romania, and then went into liquidation. So the firms themselves could no longer be sold to the Indians.

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Tag-uri: sidex, gupta



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