Labour seeks Mittal money to stay afloat

LONDON: Steel baron Lakshmi Mittal may bail out Britain’s ruling Labour Party, which is facing financial ruin, with a donation of £2 million.

Mittal, who resides in London but retains his Indian nationality, is a Labour supporter and has donated money to the party in the past, with controversial consequences.

Labour currently has debts of up to £23 million, according to a British newspaper. Prime Minister Tony Blair and his chief fund-raiser, Lord Levy, personally negotiated the deal with Mittal.

The Labour Party refused to confirm the deal. “We have no knowledge of any such deal between the Prime Minister and Mr Mittal,” said a Labour spokesman. “However, Mr Mittal is a committed supporter of the party for a long time and any financial gift from one of the world’s most successful businessmen is very welcome.”

But many believe the donation will prove contentious for both Labour and Mittal. Labour is already smarting from the recent cash-for-honours row because of which another India-born businessman, Sir Gulam Noon, and four others were denied peerages after it emerged that they had given secret loans to Labour.  

“Mittal should steer clear of this problem for now,” an NRI businessman said, on condition of anonymity. “Look at what happened to Noon and Chai Patel. It will only look as if Mittal is buying favours from the government.”

Mittal was embroiled in a cash-for-favour row in 2001 when the billionaire gave Labour £125,000 and, in return, Blair backed his bid for Romania’s nationalised steel giant, Sidex. Currently Mittal is negotiating a stake in a multi-billion-barrel oilfield in Kazakhstan, and Lord Levy is Blair’s special envoy to the country. The coincidence is too obvious to be missed by critics.

Mittal, who is Britain’s richest man with a fortune valued at £14 billion, may pull out of the deal now that it has become public, said observers.