Fine for S. African steel giant after Mittal's dealings

Monday, 30 September 2002, 07:00 Hrs
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JOHANNESBURG: Iscor, the South African steel giant in which London-based Indian steel magnate Lakshmi Mittal has a large interest, has been fined a whopping 200,000 rands.

This is the heftiest fine ever levied by the Johannesburg Securities Exchange (JSE) and is close to the maximum fine permissible of 250,000.

The largest earlier fine had been one of just 25,000 rands in December last year on another company.

The fine on Iscor followed revelations last month that Mittal, a member of its board, had dealt in shares in the company during its closed period before it published its results, when JSE rules preclude trade in the shares of a company.

Iscor was accused of failing to advise the JSE that Mittal had purchased 18 million Iscor shares during the closed period.

Both Iscor and Mittal's LNM group Friday apologised for the contravention of JSE rules. Iscor said it accepted the JSE ruling, but considered the fine to be harsh, as the company had never transgressed any JSE rules before.

Mittal and his son Aditya serve on the board of Iscor, in which LNM has an almost 35 percent shareholding. This is expected to increase when LNM receives up to 10 percent more in terms of an assistance agreement it signed with Iscor last year.

Mittal rescued the ailing former state firm last year to turn it around with technical support from LNM as well as access to international markets through the LNM group.

Iscor said earlier it had only become aware of Mittal's transaction shortly after it announced its results last month, and advised the JSE immediately.

Mittal said at the time that he had not been aware of the JSE ruling. There was speculation by financial analysts here that the company secretary of Iscor may have been held liable for this omission. Iscor has refused to comment on this possibility.

The fine is a separate issue from an investigation that is still being conducted regarding Mittal's liability for the non-disclosure. This is being done in terms of insider trading regulations.

Source: IANS
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