Tata Group chairman Ratan Tata on Monday raised a storm by hinting that he had to abandon plans to launch an airline as he refused to pay bribes to authorities to secure the necessary approvals.
Tata's sensational revelation was made during a speech at a function in Dehradun.
"I happened to be on a flight once; a fellow industrialist sitting on the seat next to me said 'You know, I don't understand, you people are very stupid. You know the minister wants Rs15 crore. Why don't you just pay, you want the airlines.' I said, you will never understand this; I just want to go to bed at night knowing I haven't got the airline by paying for it," Tata said.
"Ten to 15 years ago, we were trying to start a domestic airline with Singapore Airlines and there were lots of problems because we went through three governments... We approached three prime ministers also. But an individual thwarted our efforts to form the airlines," Tata said.
The group later clarified that its chairman had not mentioned the name of any minister. "No minister ever asked Tata for a bribe. The fellow industrialist expressed his personal view point that some minister was asking for a bribe and that Tata in no way was in agreement to the fact that he was asked for bribe by any minister," a company statement said.
Tata's uncle JRD Tata set up India's first commercial airlines in the 1930s, which was later nationalised as Air India.
The Tata-Singapore Airlines partnership first made a bid to enter the domestic aviation sector in 1995. After the proposal got stuck in a maze of lobbying, the Tatas decided to go it alone, but with a technical alliance with SIA.
Though it eventually withdrew the plan to start a domestic airline, the group had announced plans to buy a 40% stake in Air India after the government had moved a proposal to sell equity in the carrier.
Two ministers in charge of civil aviation in the time period indicated by Tata said he should clear the air. "Let the PM conduct a CBI enquiry into this (allegation)," CM Ibrahim said in Bangalore. He was minister in the HD Deve Gowda-led-government. Shahnawaz Husain, aviation minister during the NDA's reign, said: "It would have been better if Mr Tata had made clear the names of the civil aviation minister..."