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MUMBAI : Cyrus Mistry, the ousted chairman of Tata Sons Ltd, has accused the Tata group of related-party transactions that he claimed were designed to benefit a select few.

Mistry made the allegations in his affidavit submitted to the Supreme Court, where he is fighting a protracted legal battle with India’s largest conglomerate over his ouster in October 2016 from the group’s holding company.

The Tata group and Mistry’s investment firms—Cyrus Investments Pvt. Ltd and Sterling Investments Pvt. Ltd—have been involved in the litigation since December 2016. The investment firms, which together own 18.4% of ordinary shares in Tata Sons, had filed a petition alleging oppression and mismanagement. The firms won relief from the National Company Law Appellate Tribunal (NCLAT) on 18 December, which said that there was a case of oppression at Tata Sons and reinstated Mistry as the executive chairman of the company. Subsequently, Tata Sons moved the Supreme Court on 2 January. Earlier in June, the top court agreed to hear the Mistry firms on offering additional relief, mainly their scope to nominate a director on the board of Tata Sons by virtue of being the largest shareholder in the holding company.

In the affidavit filed on Friday in response to Tata Sons’ petition challenging his reinstatement by the NCLAT, Mistry cited alleged related-party deals involving purchase of aircraft by the Tata group without appropriate approvals and award of “regulatory and corporate affairs liaising" work for AirAsia India, a joint venture between Tata group and Malaysia’s AirAsia Bhd, to HNR Trading PTE Ltd, a Singapore-registered entity. He alleged that the firm was paid 22 crore for its services through a “sham contract".

“It appears till date no action has been taken to recover monies paid to HNR Trading," the two Mistry firms said in their reply to the Supreme Court. The Mistry firms also pointed out that “losses at Air Asia have become over four times in the last financial year, necessitating increased investments than what was agreed upon".

Cyrus Mistry and Tata Sons did not respond to queries emailed on Monday.

In the court submission, the Mistry firms also alleged Tata Motors Ltd was forced by the group’s chairman emeritus Ratan Tata to sign a joint venture with Jayem Auto, where the automaker’s management was compelled to grant additional business to Jayem Auto. The other charges include various transactions entered between the Tata group and businessman C. Sivasankaran (through his group companies), which benefited Siva group to the tune of 1,000 crore. “It is pertinent to mention that Tata Sons invoked arbitration against Siva Group as late as 15 June 2017, i.e. 6 months after filing the company petition," according to the affidavit.

Mint reported on Sunday that in his affidavit, Mistry said that three-and-a-half years later, the concerns that he had expressed previously over value-destructive acquisitions made by his predecessor Ratan Tata, which he had inherited, have become a reality. Soon after he was removed as the Tata Sons chairman, Mistry wrote a letter to the board highlighting certain investments done by the previous chairman and this letter has been the focal point of a bitter exchange between the two warring sides.

In addition to the related-party transactions, Mistry has also questioned the Tata group’s continued presence in loss-making ventures such as the Nano minicar project and Tata Steel Europe that has incurred losses of $495 million as of 2019.

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