Even as Tata Sons’ interim chairman Ratan Tata takes charge of the $103 billion conglomerate following the removal of former chairman Cyrus Mistry, he may have to contend with a new adversary, from outside the Tata Group.
Tata faces a fresh attack….
On Thursday, Bharatiya Janata Party’s MP and Rajya Sabha member Subramanian Swamy reportedly said that Ratan Tata had been “the most corrupt chairman” in the history of the Tata group. Swamy said that the latter was “not even a Tata” as his father had been an adopted child.
Incidentally, this is not the first time that the former Union minister has trained his guns on Tata who headed the Tata Group for 21 years before Cyrus Mistry took change as its chairman in 2012.
Earlier, Swamy had reportedly written to Prime Minister Narendra Modi demanding that the government set up a special investigation team to probe Tata for money laundering.
In fact, even before the controversy surrounding Mistry’s removal broke last month, Swamy had moved the Delhi High Court demanding that the flying license awarded to AirAsia India be suspended, alleging that the same had been obtained through “fraud.” AirAsia India is a joint venture between Malaysia’s AirAsia Bhd and the Tata Group.
In his letter to the board following his ouster Mistry had spoken of a “fraudulent transaction” of Rs 22 crore, involving “non-existent” parties in Singapore and India.
Before the controversy around the Tatas surfaced, Swamy had also made several allegations against former Reserve Bank of India governor Raghuram Rajan, whom he had accused of being anti-national and of hurting India’s interests since he had refused to lower interest rates. He had written to Modi twice, accusing Rajan of leaking confidential information, among other things. This led to a public controversy, following which, Rajan decided not to seek a second term at the central bank.
….even as the battle with Mistry gets uglier
Swamy’s allegations against Tata come even as the war of words with Mistry seems to be getting uglier.
Following his removal as the chairman of Tata Sons, the group holding company, Mistry, who continues to head the boards of various listed Tata companies like Tata Steel, Indian Hotels and Tata Motors, has reportedly decided not to resign from them.
Following media reports to this effect, The Economic Times on Friday said that the Tata Group will move to oust Mistry from group companies. The report said that while the board of Indian Hotels is likely to meet on 4 November, Tata Chemicals board will meet on 9 November. Boards of other group companies too are likely to meet in the course of the next month.
While Mistry is the non-executive chairman on the board of Indian Hotels, he is the chairman of at least six Tata group companies including TCS, Tata Steel, Tata Global Beverages, Tata Power, Tata Motors, and Tata Chemicals.
“In the event Mistry doesn’t step down either on his own or after prodding from the board, Tata Sons as the key shareholder will be forced to call for an EGM by issuing a special notice. They will work with both foreign and domestic institutional investors to rally support,” the ET report cited an unnamed company official as saying.
Like this report? Sign up for our daily newsletter to get our top reports.