Tata Sons Said to Set Up Team to Respond to India Regulatorsby
Ratan Tata has set up a team to collect data from the units of India’s largest conglomerate to help Tata Sons Ltd. rebut allegations made by ousted Chairman Cyrus Mistry and respond to queries from regulators, according to people with knowledge of the matter.
Ratan Tata, interim chairman of Tata Sons is himself leading the team, the people said asking not to be identified as they aren’t authorized to speak to the media. A Tata spokesman confirmed the details. The company also plans to host an investor meet soon, the spokesman said.
India’s market regulator is examining a letter written by Mistry alleging lapses in corporate governance, people familiar with the matter said on Thursday. Mistry in the letter dated Oct. 25 accused directors at Tata Sons of wrongfully dismissing him and warned that the tea-to-software giant may face 1.18 trillion rupees ($18 billion) in writedowns because of five unprofitable businesses. Tata on Thursday said Mistry was fired because of a growing “trust deficit” with the biggest shareholders of the group.
"In going public in his self-defense Mistry has altered the group’s equation with the eco-system within which it operates,” Institutional Investor Advisory Services India Ltd., a proxy adviser, said in a statement on Friday. “The group should no longer expect to be revered and now must prepare for coming under far greater scrutiny of its financials and workings.”
Mistry said he inherited a debt-laden enterprise saddled with losses and singled out Indian Hotels Co., Tata Motors Ltd.’s passenger-vehicle operations, Tata Steel Ltd.’s European business, as well as part of the group’s power unit and its telecommunications subsidiary as "legacy hotspots," according to the e-mail.
The team will gather information from companies including Tata Teleservices Ltd., Tata Motors and Tata Power Co. and AirAsia India Pvt., a venture between Tata Sons with AirAsia Bhd., the people said.