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Mistry hits back, says Tata Sons ‘misleading’ shareholders

PTI | Mumbai |


Rebutting allegations of Tata Sons
of rise in expenses during his tenure as “misleading”, ousted
chairman Cyrus Mistry on Tuesday hit back saying networth of the holding company has
actually risen and pointed out high costs relating to office and corporate jets
used by Ratan Tata and his PR set.

Mistry’s office in a statement said one of the reasons for a rise in expenses
under his tenure was because Tata Sons was bearing some costs on behalf of the
Tata Trusts, its biggest shareholder.

Impairments and writedowns were due to legacy issues, largely relating to Tata
Teleservices Ltd, it said.

Mistry, the statement said, did not approach any of the Tata Group business
with the intention of doing a “quick cleansing so that he could
immediately demonstrate decent results going forward.”

Stating that some of the other investments of Tata Sons were of
“questionable nature”, the statement referred to Rs 400 crore
investment in Nagarjuna refineries and a joint venture with Sasol Ltd for
converting coal into liquid fuel.

Tata Sons, the holding company of the USD 103 billion Tata Group, had as one of
the reasons for ousting Mistry cited expenses (other than interests on debt) on
staff rising from Rs 84 crore to Rs 180 crore during his four-year tenure.

It also cited increase in other expenses from Rs 220 crore in 2012-13 to Rs 290
in 2015 (excluding exceptional expenses) and rise in impairment provisions from
Rs 220 crore in 2012-13 Rs 2,400 crore in 2015-16 indicating inability to stem
falling values and turned around the ‘hot spots’ referred to by Mistry.

“The Tata Sons full-page newspaper advertisement on November 11 vaguely
accused that expenses and impairments increased at Tata Sons during Cyrus
Mistry’s Chairmanship.

Insinuating the increase in expenses as a failure of Mr Mistry is another
brazen attempt to mislead the public and shareholders,” the statement

It said “significant” costs were incurred for corporate jets used by
Ratan Tata, Mistry’s predecessor who was brought back after Mistry was abruptly

Among the explanations, Mistry says that Tata Sons was bearing entire office
costs for Ratan Tata, the chairman emeritus, and a “significant
amount” of this was for the use of corporate jets.

Mistry said the replacement of controversial lobbyist Nira Radia’s Vaishnavi
Communications with Arun Nanda’s Rediffussion Edelman just prior to his taking
over also resulted in a jump in costs from Rs 40 crore to Rs 60 crore.

“She (Radia) had been replaced by Arun Nanda (Rediffusion Edelman) who had
been brought in by Ratan Tata at a cost of Rs 60 crore per year for PR support
just prior to Mistry taking charge,” his office said in the statement.

It added that part of the public relations infrastructure paid for by Tata Sons
was also provided to Ratan Tata-headed Tata Trusts.