Ratan Tata fully in loop of Docomo dispute handling, says Mistry
Seeking to clear the air on charges that he had not handled the legal dispute between Tata Sons and Japan’s NTT Docomo in a manner befitting the Tatas, ousted Tata Sons chairman Cyrus Mistry on Tuesday clarified on the steps taken and also denied the allegations that Tata Sons and Tata Trusts representatives were not informed about the dispute.Cyrus Mistry Exit Updated: Nov 01, 2016 16:05 IST
Seeking to clear the air on charges that he had not handled the legal dispute between Tata Sons and Japan’s NTT Docomo in a manner befitting the Tatas, ousted Tata Sons chairman Cyrus Mistry on Tuesday clarified on the steps taken and also denied the allegations that Tata Sons and Tata Trusts representatives were not informed about the dispute.
“Insinuations that the Docomo issue was handled under the watch of Mr 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,” a statement put out by Cyrus Mistry’s office said.
Tata Sons and its erstwhile telecoms joint venture Docomo are embroiled in a legal dispute regarding an alleged violation of contract by the Tatas on buying out Docomo’s stake in the JV. The International Court of Arbitration in London has asked the Tatas to pay $1.17 billion. The Tatas have deposited the amount in an escrow account with the Delhi High Court after Docomo sought the court’s aid in enforcing the award.
“A number of discussions on the Docomo situation had been held in the Tata Sons board. Mr Mistry had always mentioned that the Tatas should honour all commitments within the law,” said the statement from Mistry’s office, detailing the chronology of the dispute. “Tatas, under Mr Mistry requested Docomo to join in seeking approval of the Reserve Bank of India (RBI). Docomo did not agree. Nevertheless, Tatas applied to the RBI for approval. Since RBI approval was not forthcoming, Docomo initiated arbitration. The (arbitration) award was passed in favour of Docomo and against the Tatas. Tatas under Mr Mistry did not challenge the award in the UK. On the contrary, RBI was approached once again by the Tatas for permission to pay the amount awarded. RBI again refused permission.”
The dispute, which fuelled concerns overseas about Indian companies not honouring contractual agreements, and which also triggered strong statements from the Japanese company, has been cited as one of the major differences that representatives of Tata Trusts had with Cyrus Mistry, and which eventually led to Mistry being voted out as chairman.
Mistry’s statement however claimed that “throughout the process, Ratan Tata and N.A. Soonawala, trustee, (Tata Trusts) were kept informed and they participated in separate meetings held with Mr Mistry. They also participated in the meeting with the legal counsel who represented Tatas in the litigation. At all times Ratan Tata and Soonawala concurred and approved the course of action adopted by Tatas and as advised by legal counsel.”
“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 concurrence of Ratan Tata and Soonawala, is as false as it is mischievous,” the statement said.