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Friday, 22 February, 2002, 04:01 GMT
Mittal 'outraged' by Steelgate row
Lakshmi Mittal and Tony Blair
Lakshmi Mittal had a letter of support from Tony Blair
The billionaire Labour donor at the centre of the Steelgate row has broken his silence on the affair and says he has nothing to hide.

Associates of Indian tycoon Lakshmi Mittal say he is outraged by the smears over his buyout of Romania's nationalised steel company, according to the Economist magazine.

I have absolutely nothing to hide. I have a very British identity.

Lakshmi Mittal
Tony Blair continues to come under fire for writing to his Romanian counterpart, Adrian Nastase, supporting Mr Mittal's takeover of Sidex.

The Conservatives and Liberal Democrats ask why the prime minister backed the Labour donor's company despite it not being British.

Those attacks were reignited on Thursday when a former minister revealed the last Conservative government rejected claims in 1995 a subsidiary of the company was British.

LNM has a London headquarters but its operating arms are both registered overseas and only about 100 staff are UK based.

'British interests'

Mr Mittal, who gave 125,000 to Labour last year, would not give a formal interview to the Economist but the magazine says "authoritative sources" have made clear his views.

Giving his side of the story for the first time, the businessman says: "I have absolutely nothing to hide.

"I have a very British identity. I have British companies with a turnover of 40m a year.

Matthew Taylor, Lib Dem Treasury spokesman
Taylor wants the UK ambassador to go before MPs
"What is more I have settled here and raised my family here. I pay tax here.

"It's true that I run a multi-national group but I have no interests in India. So please tell me what should my identity be?"

Those comments about tax follow reports this week that Mr Mittal avoids paying millions of pounds of UK personal tax by using a legal loophole.

Downing Street has consistently stressed Mr Blair wrote his letter on the advice of the British ambassador to Romania, who did not know about Mr Mittal's donation.

'Privatisation helps UK'

Mr Mittal's associates say the businessman asked neither Number 10 nor the Foreign Office for the letter.

And the tycoon rejects suggestions the deal acted against British interests because it helped a competitor to UK firms like Corus, formerly British Steel.

Instead, Mr Mittal says the deal is "very much in keeping" with the UK government's policy of encouraging privatisations and market reforms, especially in countries wanting to join the European Union.

Tim Eggar
Tim Eggar says his department did not see Ispat as British

Any British steel company would prefer to compete against a private sector industry rather than a state-run rival, he argues.

That fits in with the comments of Richard Ralph, UK ambassador to Romania, who says the privatisation was in the interests of Britain and western Europe generally.

But on Thursday it emerged the last Conservative government took a very different view of the British status of Mr Mittal's companies.

Irish takeover lobbying

Former Tory industry minister Tim Eggar said his department objected strongly to the 1995 takeover by Mr Mittal's Ispat subsidiary of Irish Steel because it would hurt British interests.

Mr Eggar told BBC Radio 4's World At One programme how the British government had lobbied against an Ireland giving a subsidy during Ispat's 1 purchase of the struggling Irish Steel.

At one stage it was claimed the UK government should not necessarily support British Steel's opposition to the Irish takeover because Ispat was a British company and had British interests.

Mr Eggar said: "We looked at that claim, I seem to remember, and rejected it."

The Department of Trade and Industry says it was not contacted at any stage by Downing Street or the Foreign Office over the Britishness of Mr Mittal's companies before Mr Blair wrote his letter supporting the Romanian deal.

Shadow cabinet office minister Tim Collins launched a new attack on Mr Blair, saying: "He can no longer credibly resist the case for a full independent inquiry into the government's handling of this matter."

Similar complaints about unanswered questions came from Lib Dem Treasury spokesman Matthew Taylor, who wants Mr Ralph brought before a Commons committee to shed light on the row.

Adam Raphel, the Economist magazine
"He is outraged by what he thinks is very unfair coverage of this affair"
Shadow cabinet office minister Tim Collins
"Why did the UK government go to such extraordinary lengths on behalf of Mr Mittal?"
See also:

22 Feb 02 | UK Politics
Mittal 'stopped LSE donations'
19 Feb 02 | UK
Who's funding who?
19 Feb 02 | UK Politics
Steel boss blasts 'naive' Blair
18 Feb 02 | UK Politics
Blair silent on Mittal's US links
17 Feb 02 | UK Politics
Labour tops sleaze poll
17 Feb 02 | UK Politics
Sleaze watchdog 'nobody's patsy'
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