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Tuesday, 12 February, 2002, 21:24 GMT
Tory pressure over Mittal row
Lakshmi Mittal
Mr Mittal is the UK's eighth richest man
The government is under pressure to reveal whether it is a common practice for ministers to endorse business deals.

Conservative foreign affairs spokesman Michael Ancram has tabled a parliamentary question asking how many times British embassies had requested the kind of government support Tony Blair gave to businessman Lakshmi Mittal.

The UK prime minister is actively undermining our steel industry in Wales

Ieuan Wyn Jones
Plaid Cymru leader
The prime minister wrote to the Romanian prime minister welcoming Mr Mittal's purchase of a steelworks in the country.

Mr Mittal is a billionaire businessman who donated money to the Labour Party during last year's election campaign.

Mr Ancram also wants a list of any requests from UK embassies, the requested a list of such requests, the value of the contracts involved, and the outcome of any endorsement.

As the latest "cash for favours" row continues, Mr Mittal has highlighted his company's British base and stressed the business deal was sealed before Mr Blair's letter.

Downing Street has dismissed claims of wrong doing, saying Mr Blair was acting on the direct advice of the British ambassador in Bucharest.

Dates discrepancy

The row centres on a letter Mr Blair wrote to Romanian Prime Minister Adrian Nastase two days before a draft agreement for the 300m sale of the country's nationalised steel company Sidex was signed.

The potential buyer was a firm owned by Mr Mittal, who had donated 125,000 to Labour.

Mr Mittal told the Daily Telegraph he made the donation before last year's polls, explaining: "It makes more sense to give money before an election, when parties need it."

Tony Blair
Downing Street says Blair did not know about the donation
The Electoral Commission records the donation as being made on 28 June - after the election - but a Labour spokesman confirmed the cheque had been sent at the end of May.

The spokesman said the dates discrepancy was because parties were allowed 30 days to check they could accept a donation.

The Conservatives say the timing of the gift is significant as the run-up to an election is a sensitive time for politicians.

Mr Mittal is not a British citizen but he lives in London and is a registered voter, so is not affected by the bar on foreign political donations.

'No embarrassment'

The prime minister's spokesman says Mr Blair was not aware of the gift when he signed his letter of support.

Mr Blair's official spokesman said the prime minister was not embarrassed to promote British business overseas, as he did in many similar cases.

Plaid Cymru first raised the case, which comes in the lead-up to this week's by-election in Ogmore.
Adrian Nastase, the Romanian prime minister
Blair wrote to Adrian Nastase, the Romanian prime minister

Most of LNM's staff are employed overseas and the subsidiary buying Sidex is registered abroad, although the parent company is UK-registered, with a London headquarters.

Plaid Cymru says the company was in competition with British plants, such as Corus - formerly British Steel - which a year ago cut 6,000 jobs.

Party leader Ieuan Wyn Jones said: "The UK prime minister is actively undermining our steel industry in Wales by actively supporting a competitor to invest in Romania at a time when 3,000 Welsh steelworkers were losing their jobs."

But Downing Street said Corus did not bid for the contract and Mr Mittal has now highlighted his company's British links.

Speaking from Delhi, Mr Mittal said: "London has been the main office of the group. All our services come from Britain - lawyers, accountants, financial services.

Investigation call

"British companies work for us. And when we do business with other countries, it stimulates interest in Britain."

Mr Mittal said his company had qualified for the tender in Romania in 2000 - before Mr Blair's letter.

The Conservatives want the Committee for Standards in Public Life to investigate the affair.

Although the Romanian ambassador in London, Dan Ghibernnea, has said Mr Blair was "in the clear" because the deal had been finalised "long before" the letter arrived.

The BBC's Shaun Ley
"The timing of this is not a coincidence"
Adam Price, Plaid Cymru
"I fail to see where the legitimate British interest was in this case"
See also:

11 Feb 02 | UK Politics
Blair defends business support
11 Feb 02 | UK Politics
Blair dismisses influence claims
07 Nov 01 | Business
Romania clinches steel sale
01 Feb 02 | Business
Enron scandal at a glance
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