MUMBAI: Ousted Tata Sons Chairman Cyrus Mistry has questioned Tata group's continued investments in the latter's several unprofitable businesses and projects including the Nano and Tata Steel Europe, which incurred losses worth $495 million in 2019.
Mistry, who is fighting a legal battle with Tata Sons over his ouster and seeks proportional board representation as the largest shareholder in the holding company of the Tata group, on Friday made these allegations in a fresh affidavit filed in the Supreme Court (SC) where the matter is currently sub judice.
While Mistry’s allegations are not entirely new and have been noted by lower courts in the past, they may have a bearing in the final outcome of the acrimonious battle between the two sides going on since October 2016.
In the affidavit filed on Friday, Mistry said three and half years later, the concerns he had expressed over value-destructive acquisitions made by his predecessor Ratan Tata have become reality. In October 2016, after Mistry was removed as the chairman of Tata Sons, he had written a letter to the board highlighting certain investments done by the previous chairman. This letter has been the core and most bitter point of exchange between the two.
Mistry estimated a loss around of ₹60,000 crore by Tata Teleservices Ltd, questioned the continued existence of the Tata Nano plant despite zero production and investment in Tata Steel Europe despite losses. Mistry also pointed to risk of considerable future impairments in the Mundra Project.
The Supreme Court was hearing a plea by Mistry against a National Company Law Appellate Tribunal (NCLAT) order pronounced in December. Mistry sought more relief as ‘the NCLAT order did not do full justice’. As additional relief, Mistry firms have sought directorship on the board of Tata Sons, proportionate to their shareholding.
In his affidavit, Mistry also said the objections raised by him on these bleeding legacy assets should be brought on record.
Mistry said even after an investment of ₹18,000 crore in the Mundra project, which was aggressively pursued by Ratan Tata, it is yet to turn around.
“Tata Power has made a further provision of ₹3,550 crore, and the managing director of Tata Power has recently confirmed in the public domain that even after tariff revision, the project would continue to bleed," said Mistry.
The Tata Nano project, which had accumulated losses of ₹6,000 crore as of Q1FY17, has still not been shut. Mistry said the decision to close the Nano plant, taken before his removal in October 2016, has till date not been implemented for emotional reasons.