Tata Sons rubbishes Mistry allegations
As the duel between Tata Sons and Cyrus Mistry keeps shifting gears, the stage is set for a dramatic climax where one of India’s famous family conglomerates might have to answer some imperative questions.
On Wednesday, the recently-sacked ex-chairman of Tata Sons, Cyrus Mistry sent a five-page letter listing the worst of the predicaments he faced during his tenure as the helm of the organisation. He mentioned being a “lame duck” chairman who regularly faced interference, including instances where he was pushed to sign deals with very little idea about them. Despite his warnings about the company risking huge losses across a number of businesses, he was hardly taken seriously. However, the Tata Sons on Thursday, hit back stating that the allegations brought by Mistry are unsubstantiated and malicious.
Statement by Tata Sons
Quite evidently vexed by the allegations made by Mistry, Tata Sons issued a statement which read, “It is a matter of deep regret that a communication marked ‘confidential’ to Tata Sons board members has been made public in an unseemly and undignified manner. The correspondence makes unsubstantiated claims and malicious allegations, casting aspersions on the Tata group, the Tata Sons board and several Tata companies and some respected individuals. These will be responded to in an appropriate manner.”
In reply to some of the other accusations by the ex-chairman, the statement by Tata Sons outlines the fact that the interim chairman in his first interaction with senior leaders has stressed the need to continue focussing on building great businesses while emphasising on delivering strong shareholder returns.
The statement further read, “The Tata Group is proud of its rich legacy of contributing to the growth of the nation. During a long history, it has faced many challenges and the employees of this group have worked hard to create great companies, and deliver shareholder value. The Tata way is to not run away from problems, or constantly complain about them, but firmly deal with them and build a better tomorrow.”
March 25, 1991 :: JRD Steps Down From The Chairmanship of Tata Sons In Favour of Ratan Tata pic.twitter.com/EcozP0hLUd
— indianhistorypics (@IndiaHistorypic) October 27, 2016
Although allegations such as aggressive accounting, fraudulent payments, potential write-downs and unmanaged debts highlighted in Mistry’s email are yet to get the deserved reply, the public image of the company seems to be at stake. On Wednesday, as the copies of Mistry’s email circulated in the newsrooms across the country, the share prices of Tata Steel Ltd, Tata Motors Ltd and Indian Hotels Co., the owner of the Taj brand, tumbled by 4 pc and Tata Power Co. depreciated by 2 pc. Along with these four, the Tata Teleservices Maharashtra Ltd, a struggling wireless carrier, stumbled again on Thursday. These five companies found a special mention in Mistry’s note where he mentioned the chance of fair-value write-down of USD 18 billion (EUR 16.5 billion) if the assessment was done on more realistic terms. Stay tuned for further developments on the saga that would likely have ripple effects across industry verticals in the coming days.
Will look into issues raised by erstwhile Tata Sons Chairman #CyrusMistry on fraudulent transactions at #AirAsia India: Aviation Ministry
— All India Radio News (@airnewsalerts) October 27, 2016
