Ratcheting up war of words, ousted Tata Group Chairman Cyrus Mistry on Tuesday rebutted “insinuations” of mishandling a dispute with Japan’s NTT DoCoMo, saying Ratan Tata was party to all decisions regarding the telecom venture, a remark that Tata Sons rejected as ‘imagined insinuations’.
The handling of the $1.17 billion compensation slapped by an arbitration panel over breach of agreement with DoCoMo is said to one of the triggers for Tata Sons sacking Mistry last month.
Meanwhile, N S Rajan and Nirmalya Kumar resigned as non- executive directors on boards of Indian Hotels Company and Tata Chemicals respectively, days after Group Executive Council set up by Mistry was disbanded.
In a statement, Mistry’s office said all decisions on the telecom joint venture with DoCoMo and the following dispute were taken with unanimous approval of Board of Tata Sons as well as family patriarch Ratan Tata.
“Insinuations that the Docomo issue was handled under the watch of Mistry in a manner inconsistent with Tata culture and values are baseless. The suggestion that Ratan Tata and the trustees would not have approved of the manner in which the litigation was conducted is contrary to what transpired,” the statement said.
Responding to the statement, a Tata group spokesman said: “The insinuations are being imagined and this (DoCoMo) matter is sub-judice.”
Reiterating that the agreement with DoCoMo had been executed before Mistry became executive chairman of the Tata Group, the statement from his office said: “All decisions were taken with the unanimous approval of the Tata Sons board. In fact, all decisions were collective decisions and the actions were consistent with every such collective decision.”
Stating that a number of discussions on the DoCoMo issue were held in the Tata Sons board, Mistry said he had “always mentioned that the Tatas should honour all commitments within the law. This stance is based on Tata Sons’ board view and was always consistent with the series of board meetings in which the Docomo issue was discussed.”
Tata Group is entangled in a legal tussle with Japanese firm, NTT DoCoMo. DoCoMo had in November 2009 acquired 26.5 per cent stake in Tata Teleservices for about Rs 12,740 crore (at Rs 117 per share) with an understanding that in case it exits the venture within five years, it will be paid a minimum 50 per cent of the acquisition price. DoCoMo, in April 2014, decided to exit the joint venturethat struggled to grow subscribers quickly and sought Rs 58 per share or Rs 7,200 crore from the Tatas.
But the Indian group offered Rs 23.34 a share in line with RBI guidelines that states that an international firm can only exit its investment at a valuation “not exceeding that arrived at on the basis of return on equity”.
The Japanese firm then dragged the Tatas to international arbitration where it won a $1.17 billion award.
Tata Sons has said they will resist enforcement of the arbitration award in India as also other jurisdictions as it has been barred by Indian law and public policy.
Insisting that Ratan Tata and NA Soonawala, Trustee, were kept informed throughout the process, the statement by Mistry’s office said they even participated in separate meetings held with him.
“They also participated in the meeting with the legal counsel (who also happened to be a trustee of the Dorabji Tata trust) and who represented Tatas in the litigation. At all times, Ratan Tata and Soonawala concurred and approved the course of action adopted by the Tatas and as advised by legal counsel,” it said.
“In light of the above facts, to suggest that Mr Mistry acted on his own, or contrary to ‘Tata values’, or without the knowledge and/or concurrence of Ratan Tata and Soonawala is as false as it is mischievous,” the statement by his office added.
In separate developments, N S Rajan and Nirmalya Kumar have resigned from their respective board positions at Indian Hotels Company and Tata Chemicals.
Rajan resigned as a non-executive director with effect from October 28, Indian Hotels Company ltd said in a BSE filing.
In a similar intimation to the bourse, Tata Chemicals said Nirmalya Kumar, non-executive director, has resigned from the company’s board with effect from October 31, 2016.
Rajan, Kumar and Madhu Kannan, another member of the erstwhile GEC, had quit the Tata group last week.
last week, when the ouster of Mistry by the Tata Sons board was announced, the GEC was also disbanded. Tata Group’s website removed all the details related to the GEC, including profile of the members.
The GEC, headed by Mistry, was set up in April 2013 with the objective of providing strategic and operational support to him.
Government to steer clear of Tata-Mistry tussle, for now
New Delhi: Ousted Tata Group chairman Cyrus Mistry has sought an appointment with Finance Minister Arun Jaitley, who also heads the Ministry of Corporate Affairs, but the Government has decided to stay clear of the boardroom tussle in India’s largest conglomerate, for now.
Mistry, the first non-family chairman of Tata Sons, the holding company of the Tata Group, who was unceremoniously removed from his position last month, has sought an audience with Jaitley possibly to explain his side of the story.
But the Finance Minister has for now decided not to meet either side as the Government does not want to be seen getting embroiled in the Tata Group turmoil, a senior Government official said.
Ratan Tata, Mistry’s predecessor who was brought in as his replacement in the interim period, has so far not sought an appointment with Jaitley even though there are reports that the two had sought time to meet Prime Minister Narendra Modi.
The official said the Government will not suo motu get involved in the turmoil at the Bombay House, the seat of the $100 billion salt-to-software conglomerate.
Ministers, he said, are unlikely to meet either side till the matter reaches the National Company law Tribunal or any other judicial forum because then it will be a legal battle with the government having practically no role to play.
The Government does not want to give an impression of siding with either party, the official added.
On his part, Minister of State for Finance Arjun Ram Meghwal said the Government is “keeping a close watch on developments” in the Tata-Mistry tussle.
“Sebi and other agencies are also keeping a vigil, but so far, nothing has been referred to the Ministry of Corporate Affairs,” he said.