The boardroom battle for control of the Tata Group on Tuesday took on a more personal nature with the office of ousted group chairman Cyrus Mistry levelling serious allegations of wrong investments made by Tata Sons at the behest of now interim chairman Ratan Tata, which adversely impacted its finances.
The office of ousted Tata Sons chairman Cyrus Mistry has said that impairments and write-downs at Tata Sons were mainly due to legacy issues, largely relating to Tata Teleservices.
In its latest attack on Tata Sons, Mistry’s office said there were investments of “questionable nature” such as the Rs 400-crore put in in Nagarjuna Refineries and in the joint venture with Sasol.
The statement mentions more. “One investment in Piaggio Aero, a company in the aerospace sector with a friend of Mr Tata, was especially distressing. Tata Sons decided to exit the company at a commercial loss of Rs 1,150 crore,” said the statement without elaborating on the associate of Tata nor the company. “This was after the efforts of Mr Bharat Vasani (Tata Sons general counsel) and Mr Farokh Subedar (Tata Sons chief operating officer) who managed to recover Rs 1,500 crore, overcoming the objections of Mr Ratan Tata who in contrast, favoured increasing investments in that company. Today, the company is, for all practical purposes, nearly bankrupt.”
This is the second time that the ousted chairman has made charges against Ratan Tata. In his letter to Tata Sons board on Oct 25, Mistry had mentioned about supplies from Tata Motors’ Nano project to an auto unit where “Mr Tata has invested.”