The Miglanis of Uttam Galva Steel Ltd, co-promoted by ArcelorMittal, are under the radar of the income-tax authorities, according to sources.
Sources in the Mumbai Income Tax (I-T) department said they had unearthed unaccounted income and assets of around Rs 600 crore in a survey conducted on business premises of Uttam Galva Metallics Ltd, an unlisted company owned by the Miglanis, on Wednesday and Thursday.
Uttam Galva Metallics, with its 0.5 million tonnes per annum (mtpa) pig-iron plant in Wardha, Maharashtra, is outside the purview of Uttam Galva Steel, the listed company, where ArcelorMittal is a co-promoter.
Ankit Miglani, a promoter of Uttam Galva Metallics and the deputy managing director of Uttam Galva Steel, said, “There was no survey on Uttam Galva Steel Ltd. I am not bound to comment on Uttam Galva Metallics as it is an unlisted company.”
When contacted, Swatantra Kumar, director-general (investigations), income tax department, Mumbai, refused to comment.
The share price of Uttam Galva Steels fell by 6.61 per cent to close at Rs 65 per share on the Bombay Stock Exchange on Friday.
In FY10, ArcelorMittal through its subsidiary ArcelorMittal Netherlands BV had bought a 33.8 per cent stake in Uttam Galva Steel for Rs 500 crore to become the co-promoter of the company, with the Miglanis keeping the rest 37.03 per cent stake.
Of late, the Miglanis have been looking to invest in steel companies in India through their unlisted companies.
As recently as November, the Miglanis, through Uttam Galva Metallics, bought a 58.35 per cent stake in Lloyds Steel. The deal was done in phases with 24.53 per cent bought in March 2012 for Rs 180 crore. Later, the company was allotted 38 crore preferential shares and then acquired 6.37 per cent stake through the open offer route for Rs 77.44 crore. The firm has said that it will invest Rs 380 crore in Lloyds Steel to revive the loss-making company.
