The ousted chairman of Tata Sons, Cyrus Mistry on Tuesday hit back at Tata’s citing that the allegations labelled by Tata’s that he handled the DoCoMo issue ‘in a manner inconsistent with Tata culture and values,’ is baseless and it’s ‘false and mischievous’ to suggest that he acted on his own or without the knowledge of Ratan Tata on the Tata-Docomo matter.
A statement from Cyrus Mistry’s office said that the suggestion that Mr. Ratan Tata and the trustees would not have approved of the manner in which the litigation was conducted is contrary to what transpired.
“A number of discussions on the Docomo situation had been held in the Tata Sons board. Mr. Mistry had always mentioned that the Tatas should honour all commitments within the law. This stance is based on Tata Sons' board view and was always consistent with the series of board meetings in which the Docomo issue was discussed,” said the statement from Mistry’s office.
Mr. Cyrus Mistry upped his ante on Tata Group on Tuesday, a week after he was abruptly removed and Tata Group sources alleged that he would "be made the fall guy" in the post-mortem of the partnership with DoCoMo, which has won $1.2 billion by an international arbitration court.
The agreement with Docomo had been executed before Mr. Mistry became executive chairman of the Tata Group and under the DoCoMo deal, the Tatas were to buy back DoCoMo’s shares in Tata Teleservicesat (at least) half the acquisition prices in five years. When DoCoMo decided to exit India in 2014, it asked Tata Sons to buy back the shares but it refused saying it can’t pay the pre-determined price as the Reserve Bank of India norms do not allow the same. DoCoMo sued the Tatas in the London Court of Arbitration in January last year and won the case.
“Tatas under Mr. Mistry requested Docomo to join the Tatas in seeking the approval of the Reserve Bank of India (RBI). Docomo did not agree. Nevertheless, Tatas applied to the RBI for approval. Since RBI approval was not forthcoming, Docomo initiated arbitration. The Award was passed in favour of Docomo and against the Tatas. Tatas under Mr. Mistry did not challenge the Award in the UK. On the contrary, RBI was approached once again by the Tatas for permission to pay the amount awarded. RBI again refused permission,” said the Mistry statement adding that Docomo sought enforcement of the Award in the Delhi High Court and in order to show their bonafides, Tatas deposited a sum in excess of Rs. 8,000 crores in Court.
Mistry’s statement said that throughout the process, Ratan Tata and N.A. Soonawala, Trustee, were kept informed and they participated in separate meetings held with Mr. Mistry. “They also participated in the meeting with the legal counsel [who also happened to be a trustee of the Dorabji Tata trust] and who represented Tatas in the litigation. At all times Ratan Tata and Soonawala concurred and approved the course of action adopted by Tatas and as advised by legal counsel,” said the statement.
“All decisions were taken with the unanimous approval of the Tata Sons Board. In fact, all decisions were collective decisions and the actions were consistent with every such collective decision,” said the Mistry statement adding that in light of the above facts, to suggest that Mr. Mistry acted on his own, or contrary to “Tata values”, or without the knowledge and/or concurrence of Ratan Tata and Soonawala is as false as it is mischievous.
Earlier Mr. Mistry in his letter bomb to the Tata Sons board blamed Mr. Ratan Tata for striking such a questionable agreement. The letter said that an exit from the telecom business would cost as much as $5 billion, in addition to the payout to Docomo.
