LNM Group, the UK steel conglomerate at the forefront of the 'garbagegate' scandal engulfing Prime Minister Tony Blair, is facing legal action for not paying health and unemployment insurance for one of its factories.
The company, which is owned by billionaire Labour donor Lakshmi Mittal, has, according to reports, failed to keep up its insurance premiums for the past three months on its recently acquired Romanian steel plant, Sidex.
LNM bought the plant on October 31 from the Romanian government, renaming it Ispat Sidex, but since then has not paid the obligatory contributions on behalf of the employees, although the money has been deducted from their pay.
The new management maintains it is fulfilling its commitments under a detailed privatisation ordinance agreed with the government.
But the pensions department in Galati, where the plant is based, together with two other agencies have formally complained and have threatened legal action. The claim is worth around 50bn lei a month since November - approximately £350,000.
The agencies claim the failure to pass on the money to the funds is an infringement of the privatisation agreement but this has been disputed by LNM, which said in a statement last night that it had "met all its commitments."
Controversy surrounds Tony Blair's involvement in the deal. He allegedly lobbied the Romanian government on behalf of LNM Group to secure the acquisition.
