A much-hyped 400 million-U.S.- dollar deal between Zimbabwean and Indian steel firms is at a standstill amid revelations that the two companies are yet to sign a contract although the latter is already running the show at the company, official newspaper The Herald reported on Tuesday.

Sources with the Zimbabwe Iron and Steel Company (Ziscosteel) said contrary to initial impressions, it has been established that the Indian investors had not put anything into the company, the newspaper reported.

Industry and International Trade Minister Obert Mpofu was quoted as saying that the Indian company Global Steel Holdings ( GSHL) Limited and Ziscosteel had not signed a contract. He added that no investment has been effected.

"At the moment, we are still working on the contract and the final document is yet to be finalized," said the minister.

Ziscosteel officials expressed displeasure with their Indian " partners" who they said had already started operations without a firm contractual agreement with either Ziscosteel or the government, the newspaper said.

Officials at the Redcliff-based steelmaker further alleged that GSHL was already managing operations at the plant, adding they were "illegally exporting iron and steel to Ziscosteel offshore companies with the proceeds being kept in their offshore accounts. "

The Ziscosteel project would be the second such by the Indian company in Africa's iron and steel industry.

Government-owned Nigerian firm Ajaokuta Steel Company Limited allegedly entered into a similar contract with GSHL and had its fingers burnt.

According to reports, GSHL has a case pending before the Nigerian High Court for allegedly swindling the Nigerian government, according to the newspaper.

Source: Xinhua