Mittal rejects $114.6 mln Czech fine as unfounded

20.12.2006 | , Reuters
Zpravodajství ČTK


perex-img Zdroj: Finance.cz

Arcelor Mittal on Wednesday slammed a $114.6 million fine levied by the Czech tax authority on its Czech unit for alleged overpricing of coke ...

...supplies, saying the decision was "intentionally fabricated".

Mittal Steel Ostrava, a unit of the world's largest steelmaker created through a merger between Mittal Steel and Arcelor earlier this year, said in a statement it has appealed the fine and was considering further steps.

A spokeswoman at the tax office in the northeastern city of Ostrava said the office could not comment on individual cases.

Mittal said the tax office responded to a complaint filed by its competitor, Vitkovice Steel, owned by Russian steel maker Evraz Group SA .

Mittal said the same office ruled in earlier proceedings that the company was not violating pricing regulation in how much it charged its own subsidiary, which in turn raised prices of pig iron supplied to others.

"The company's management considers the decision as intentionally fabricated, based on intentionally distorted facts, and in a sharp contradiction with the coke market rules and basic economic principles," the Mittal statement said.

"Our coke prices reflected, and keep reflecting, the market situation in both the Czech Republic and the European Union. They have never exceeded the prices of other coke suppliers," the company added.

Czech newspapers reported Vitkovice blamed the high price of coke supplied by Mittal for boosting the costs at Mittal's blast-furnace unit Vysoke Pece Ostrava, which elevated the price of pig iron the subsidiary sells to Vitkovice.

Evraz took over Vitkovice, one of Europe's biggest makers of heavy plate, after winning a government tender in 2005, from which Mittal was ousted due to a legal row with the state and Vitkovice over pig iron prices.

That dispute appeared to trigger Vitkovice's complaint.

Mittal has filed an international arbitration suit against the Czech Republic over its exclusion from the tender, demanding 700 million euros ($925.7 million) in compensation, according to Wednesday's press reports.

The European Union member country's finance ministry said last week it held talks with Mittal over the settlement of mutual disputes and re-iterated its condition that any deal must be reached before the end of this year.

[PRAGUE/Reuters/Finance.cz]

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