Cyrus Mistry’s petition targets Ratan Tata’s friends and associates
Cyrus Mistry’s petition with NCLT alleges that dealings with Sivasankaran resulted in Tata Teleservices incurring huge losses in the DoCoMo deal
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Mumbai: The petition filed by Cyrus Mistry-controlled firms at the National Company Law Tribunal has taken aim at friends and associates of Ratan Tata, such as Lord S. Kumar Bhattacharya, C. Sivasankaran, Mehli Mistry and R. Venkataramanan. It alleges that some of them were bestowed powers to “commit serious investment decisions on behalf of the Tata Sons” while others were granted “extraordinary and undue favours”.
The petition has sought an audit by the tribunal of transactions in which some of these people were allegedly involved. It also claimed that Mistry paid a price for going after some of these people.
In Sivasankaran’s case, the petition said that dealings with Sivasankaran resulted in Tata Sons and other Tata group companies such as Tata Teleservices Ltd incurring huge losses and liabilities. It said that the ousted chairman of the Tata group holding company was pushing the Siva group of companies to pay up their share of the DoCoMo award, which amounted to Rs694 crore. The DoCoMo award is an arbitration award passed against Tata Teleservices arising out a put option exercised by NTT DoCoMo.
On 15 September, at his penultimate Tata Sons board meeting as chairman, Mistry raised this issue, the documents show. Four days later, Tata Sons received a legal notice from a firm retained by Sivasankaran’s Sterling Info-tech Ltd, alleging mismanagement at Tata Teleservices and reserving the right to seek damages to “recover its (Sterling’s) losses” arising from its investment in the company.
On 24 October, Mistry was removed as chairman.
The petiton says to “pre-empt any legal action against Siva(sankaran), and possibly a backlash from Siva(sankaran), and skeletons tumbling out of the closet, in case legal case is initiated”, Tata Sons and Ratan Tata “decided to move respondent 11 (Mistry) in an overnight surgical strike”.
“Dealings of Siva was only due to his close relationship with Ratan Tata,” said the petition.
Sivasankaran’s office did not respond to a request for comment.
The petition also alleges that Mehli Mistry, described as a distant relative of Cyrus Mistry, and personal friend and close confidante of Ratan Tata, received undue benefits and was “unjustly enriched” from his contracts with Tata Power Co Ltd. Mehli Mistry through his lawyer, Zulfiquar Memon, managing partner at MZM Legal, a law firm, refuted any wrongdoing and said that Mehli and his firms were “caught in the crossfire”.
The petition alleged that Tata Power awarded contracts over 20 years from 1993 to Mehli Mistry’s M Pallonji group of companies, “most of them without tenders”. These included dredging, barging, shipping and painting contracts awarded in different years.
“In several of these contracts, Mehli (Mistry) had no prior expertise,” it said, adding that “it is obvious that had it not been for the close personal relationship that Mehli shared with Ratan Tata, the aforesaid contracts would never have been awarded to Mehli’s companies”.
The petition said Tata Power was able save money in some cases after severing its relationship with Mehli Mistry’s companies.
“Our client has not been served with a copy of the petition filed by Cyrus Mistry before the NCLT and hence is not aware of its contents,” said Memon, responding on the behalf of Mehli Mistry. “Nevertheless, our client reiterates that all their dealings and contracts with the Tata group of companies have always been on the basis of tenders, have been fully approved by the concerned companies and are in full compliance with the Tata code of conduct to which they adhere in letter and in spirit.”
“All allegations made by Cyrus Mistry are without truth and made only as part of a campaign against Mr Ratan Tata. The allegations made are malafide, malicious and hurled with deliberate intention to malign the reputation of our client. You are aware that our client has ongoing arbitration proceedings against Tata Power. We apprehend that any adverse comment with regard to our client in your article may subvert the judicial process and prejudice our client’s case in the said arbitration,” Memon added in his response in a veiled threat.
The petition has also alleged that R. Venakataramanan, managing trustee of the Tata Trusts and former executive assistant to Ratan Tata, attempted to brush aside fraudulent transactions worth Rs22 crore in AirAsia after a forensic audit presented evidence.
A Tata Sons spokesperson said the group had nothing to add beyond Tuesday’s statement.
“Mistry was the Chairman of Tata Sons for almost four years and it is surprising that he is now making allegations on activities of Tata Sons after doing little to address them,” it had said.