In what is turning out to be a daily affair, industrialist Nusli Wadia, an independent director on board of Tata Chemicals, on Thursday shot off a letter to shareholders of the company, raising concerns about continued losses.
An extraordinary general meeting (EGM) has been called on December 23 to, among other things, remove Wadia as director. Contesting the move, his letter highlights serious business lapses that he said have inflated the debt of the company to over ₹8,695 crore in 10 years.
Tata Chemicals is one of the oldest companies of the Tata Group and has had a chequered, 77-year history, born during tumultuous years; it was listed in 1939.
“During the last 10 years mainly due to various acquisitions the consolidated debt of your company went up from ₹1,827 crore to ₹8,695 crore. This included the funding required for other joint ventures and subsidiaries. The total impairment of all the various investments made is approximately ₹2,000 crore,” Wadia said his letter. “I had raised my serious concerns over the years for providing continuing financial resources of the company toward the overseas business and assets, which were continuously under performing and incurring substantial losses.”
Pointing at the 2005 acquisition of the Brunner Mond Group, Wadia said there were apprehensions in a section of the board on the proposed acquisition that also had soda ash business operations in UK, Kenya and the Netherlands at a cost of around ₹800 crore.
Concerns about international businesses were first flagged by former chairman Cyrus Mistry – who is also sought to be removed as director via the EGMs – in his letter to the board of Tata Sons.