MUMBAI -- The Tata group, embroiled in a war of words with ousted Chairman Cyrus Mistry, has rebutted claims by Mistry, describing them "unsubstantiated" and "malicious," and defending its decision to fire the head of the conglomerate, who was in the post for less than four years.
In a statement issued to the media Thursday, holding company Tata Sons also slammed the release of the confidential email that Mistry sent to the board on Oct. 24 as "undignified" and "unseemly."
"The correspondence makes unsubstantiated claims and malicious allegations, casting aspersions on the Tata group, the Tata Sons board and several Tata companies, and some respected individuals," said the statement. "It is convenient to put selective information in the public domain to defend one's point of view."
Although the rebuttal does not address Mistry's accusations point by point -- something the company said was beneath its dignity -- it said there was a multitude of records to show that the allegations made by Mistry are unwarranted, and that "these records will be duly disclosed before appropriate forums."
Among other things, Mistry has alleged constant interference from former head, now interim Chairman Ratan Tata, which reduced him to being a "lame duck." Tata Sons responded to the allegation, saying complete autonomy was given to the chairman to manage opportunities and challenges.
"However, the tenure of the former chairman was marked by repeated departures from the culture and ethos of the group," Tata Sons said. "Efforts are now being made to level accusations against individuals and company boards for ignoring corporate governance norms that were supposedly upheld by the former chairman while in office."
Tata Sons said it was unfortunate that Mistry had overwhelmingly lost the confidence of the members of the board, and pointed out that the directors had repeatedly raised queries and concerns on certain business issues. Trustees of the Tata Trusts were increasingly concerned with the growing trust deficit with Mr. Mistry, but these issues were not addressed, Tata Sons said.
"The Tata Sons board, in its collective wisdom, took the decision to replace its chairman in the manner undertaken," it said. "The board of directors of Tata Sons is composed of several eminent personalities from all walks of life. This is not a group of people who one would expect to act without exercising proper judgment in the best interests of the entities they sit on the boards of."
The company accused Mistry of misrepresenting facts, without elaborating.
The problems at these companies are described as "legacy hot spots," which faced a write-down of 1.18 trillion rupees ($17.16 billion) if assessed realistically.
The five Tata companies addressed these allegations, saying, "The financial statements of the company are prepared on a going-concern basis and present a true and fair view of the state of affairs of the company. As part of preparation of financial statements, the value-in-use of the assets of the company is tested for impairment, as per accounting standards."
Mistry also questioned the viability of Tata Motor's Nano project, which he said had lost around 10 billion rupees at its peak. And he raised concerns over the terms of agreement between Tata and Japan's NTT Docomo over their telecom venture.
Tata Sons may have lost $5 billion by exiting the telecom venture. That is in addition to the $1.17 billion payout being sought by Docomo over claims of breach of contract, Mistry said.
The email claims the group's foray into aviation was done at Ratan Tata's behest. Mistry said that he was faced with a "fait accompli" joint venture with Singapore Airlines just months after being required to do the same with Malaysia's Air Asia, and that the capital infusion was considerably higher than had been initially committed.
The email raised "ethical concerns" over certain transactions, and said a "recent forensic investigation revealed fraudulent transactions of 220 million rupees involving nonexistent parties in India and Singapore."
To all these allegations, Tata Sons said: "It is unforgivable that Mr. Mistry has attempted to besmirch the image of the group in the eyes of the employees."