BRAVING IT THROUGH: Tony Blair (left) and Mittal

"Blair's honeymoon with the British media has been over for some time." Gautam Sen, Professor, London School of Economics

Lakshmi Niwas Mittal, the 52-year-old steel magnate, is by choice a low profile person. Better known as one of the richest Indians in the world with a fortune of over $2 billion, Mittal suddenly finds himself in the eye of an unseemly storm, and willy-nilly, on the front pages of almost every British paper in the past couple of weeks.

Is Mittal guilty of subverting the British polity for his own narrow interests, as the British press would have one believe? Is an anti-Indian businesspersons campaign at its peak after the press took a shot at the Hinduja brothers and at suspended MP Keith Vaz? Or is Mittal merely caught in a sleaze war against the British Prime Minister Tony Blair?

It all began with the £125,000 ($179,000) Mittal donated to the Labour Party last year. Though it is not unusual in the UK for political parties to accept donations from businessmen, Mittal's largesse came under scrutiny when the media began to question the letter Blair had sent to the Romanian President backing takeover of nationalised steel company Sidex by Mittal's firm, LNM. Blair asserted he was not embarrassed about supporting British business overseas and dismissed "Mittalgate", instead calling the press allegations "garbagegate".

The press zeroed in: though Mittal resides in Britain, he is not British. He holds an Indian passport but his business is registered in the Dutch Antilles. In Britain he employs less than 0.1 per cent of his worldwide employees. Moreover, the press-without recourse to clarifications from the affected party-alleged:

> that to further his business interests in the US, Mittal financially backed a campaign there that if successful would close major markets to the UK industry;

> that Mittal's donation to Labour came at the time of the election campaign but was not registered with the Election Commission till after the polls;

> that besides the letter of recommendation to Romania, the Department for International Development (DFID) had pressurised the European Bank of Reconstruction and Development (EBRD) to loan £70m ($100m) to Mittal for the Sidex takeover;

> that Mittal was not paying certain taxes required by law.

It would seem that Mittal is caught in the attack by anti-Blair mudslingers frustrated by his continuing popularity. While Blair is beating down the allegations flung at him and his party, Mittal and his aides refuse to comment on what they see as no case at all. It's an opportunity for the Opposition to dig at the Government to make it insecure, says the communications officer of a firm that deals with media on behalf of Ispat International, Mittal's corporate group.

It was the Romanian Government that came to his rescue. It stepped into the row dismissing all suggestions that Mittal needed Blair's endorsement to be allowed to invest £300 million in Romania. The Romanian Government praised Mittal's "solid reputation as a major steel producer" and insisted "the nationality of a (factory) purchaser is not important. What matters is that he invests in Romania." A spokesperson for the privatisation ministry of Romania said: "Bucharest had been convinced that Mittal was a suitable buyer long before Blair's 'unsolicited' letter arrived."

The allegations concerning a loan to part finance the Sidex takeover also appear to be without base: 10 Downing Street pointed out that Britain is only one of 23 nations on the board of the EBRD, and that only the US voted against the loan. Both DFID and the prime minister's office insisted that the decision to support the loan was taken on the advice of DFID officials. EBRD, too, denied any pressure from the Government.

Blair's fateful letter, which was formulated by his office, took "just 30 seconds" to sign. With the Romanians dismissing it, why did Blair send it in the first place? Defending his move, Blair said in the Commons: "The reason why the embassy in Romania asked us to sign the letter is because it was an important contract. We fully supported the Romanian Government's economic reform."

The contrast between la affaire Enron involving US President George Bush's friendship with Kenneth Lay and the Mittal affair couldn't be more stark. Although Lay influenced the new energy policy in the US and Enron benefited from it, Bush has not faced a hostile press. Is it because Lay was one of the club? Or does the democracy across the Atlantic understand the needs of the emerging globalised business world better? Indeed, it is significant that it is the Conservatives-who are resisting the Euro and globalisation-who are at the forefront of the hostilities.

Says Dr Gautam Sen, professor at the London School of Economics: "Bush is leading a war and his nation's total support while Blair's honeymoon with the British media has been over for quite some time. Mittal has done nothing wrong. Even the taxes that some reports claim he did not pay are legitimate as there are loopholes in the system."

The undue noise over Blair's letter for Mittal did not find a precedent when Blair had intervened in Italy two years ago on behalf of American media magnate, Rupert Murdoch. The director of Confederation of Indian Organisations, Tara Mukherji, accuses the British media of petty nationalism and says institutional racism is a reality in Britain, though covert. "The term I would use is the 'practice of lace curtainism'. Many have mastered the art of saying no on account of colour and religion without being proven racist," he says.

The two weeks of mudslinging have raised a note of resentment among desis. Says Ram Gidoomal, a successful Asian businessman and a mayoral candidate: "Post September 11, there is a climate of suspicion and mistrust. About £25 billion is contributed by the minority community towards the country's economy. For the media to point fingers at Asian businessmen is unacceptable."

A poll for the Guardian newspaper, however, shows that the allegations surrounding Blair's links with Mittal have failed to seriously dent the British leader's popularity. An ICM survey also showed that support for Blair's ruling Labour Party had emerged from a turbulent week two points higher and 17 points ahead of its closest opposition.

Asian business is one of the fastest growing in Britain. Can the Labour afford to keep away from Asian businessmen? Labour MP Parmjit Dhanda says: "No. The perception in the UK is of Asian people as entrepreneurs and businessmen. Where corrupt practices take place, it should be exposed but not all Asian businessmen should be tainted with the same brush ... the party will have to guard against allegations."

The mudslinging could hamper Mittal's style. Mittal's modus operandi is to take over ailing steel units all over the world and turn them around. But the current controversy could dog his footsteps as he trots the globe. On the other hand, he could just emerge out of it a few points stronger-like Blair and the Labour Party. As the Europe Minister Peter Hayne described it, it could well be dismissed as just a storm in a tea cup.