Mittal to suffer loss from investment pledge in RAB Capital

London, Sep 11: India-born steel tycoon Mr Lakshmi Mittal's pledge to invest $200 million in RAB Capital, a fund management and investment firm, may lead to a loss, British media report on Thursday said.

“Lakshmi Mittal's pledge to invest $200 million in RAB's Special Situations Fund last May, compounded by a 10 per cent shareholding in the Aim-listed hedge fund group, means the respected head of ArcelorMittal is sitting on a big paper loss,” Financial Times said.

Less than 18 months ago, Mr Lakshmi Mittal deepened his relationship with RAB Capital, Financial Times added.

Though Mr Mittal, who has become the world's biggest steelmaker, would suffer a significant loss, but it would not impact him much. The Financial Times said ''... but for one of the world's richest men, with a net worth estimated by Forbes magazine to b e $45 billion, the 48 per cent slump in the Special Situations Fund this year and the 66 per cent fall in the RAB share price will not make much of a dent.”

Meanwhile, RAB Capital has threatened to liquidate its flagship $900 million Special Situations Fund yesterday unless investors agreed to leave their capital locked up for the next three years.

“The threat came after turbulent markets left the Special Situations fund, set up and run by Mr Philip Richards, RAB's co-founder and former chief executive, down by 48 per cent so far this year. Last month alone, the portfolio lost 22 per cent of its va lue,” another British newspaper The Times has reported.

The Times added, “RAB has already issued a profits warning and suffered a sliding share price this year.”