The “ethical concern” raised by ousted Tata group chairman Cyrus Mistry relates to alleged payments to an aide of Mittu Chandilya, former chief executive of AirAsia India Ltd (AAIL), for help in “setting up meetings with chief ministers and politicians”, says a forensic audit report by Deloitte India.
On October 25, a day after Mistry was removed , he wrote an email to the Tata Sons board saying a report had found fraudulent transactions worth Rs 22 crore between AirAsia and companies in India and abroad.
HT has reviewed the key findings of the Deloitte India report, commissioned by the chairman of the Tata group’s audit committee at Mistry’s insistence. The report reached Mistry, who has not been on AAIL’s board, a fortnight before he was sacked, said sources.
The key finding of the audit report is that one Rajendra Dubey assisted Chandilya “in liaison activities for AAIL since August 2013 and in setting up meetings with CMs [chief ministers] and politicians across the country”.
This is not the first time the Tata group has been accused of using outside entities for lobbying with politicians and government.
Singapore-based firm HNR Trading, where Dubey is a director, received Rs 12.28 crore for “government/regulatory framework”, though there is “no evidence of actual service provided”, the report notes.
The Deloitte audit report shows senior Tata executives were aware of the payment to Dubey through HNR Trading. The report goes to the extent of talking about a plain paper agreement with HNR and varying invoice formats.
In another transaction, the audit found a Rs 10.05 crore transaction with a shell company called Link Media Immigration Services Pvt Ltd.
The audit said the payment was made on Chandilya’s direction, and that site visits revealed the addresses were bogus.
“Enquiries revealed there were significant financial transactions between Mittu’s father and Link,” says the report.
Chandilya’s phone remained out of reach and he didn’t respond to HT’s request for comment by mobile text message or on Twitter. Dubey too did not respond to calls and mobile text messages from HT.
A spokesperson for the Tata group said: “Please refer to the response of Air Asia which said an investigation is underway.”
An AirAsia spokesperson said in an emailed response: “AirAsia (India) Limited, AirAsia Berhad and Tata Sons Limited look into all allegations of impropriety and misappropriation very seriously.
“The three entities do not approve of any unethical practices and will take very stern action against the perpetrators at all levels of the organisation. The three entities would like to reiterate that they strictly adhere to internal procedures and policies”.