By Aditi Shah and Abhirup Roy
MUMBAI Cyrus Mistry, who was ousted as chairman of Indian conglomerate Tata Sons last week, said "insinuations" that he mishandled a dispute with Japanese telecoms firm NTT DoCoMo Inc were baseless, ratcheting up a war of words with the Tata board.People close to the matter have said one of the reasons for Mistry's dismissal was his handling of a long-running dispute with DoCoMo, Tata Sons' partner in a telecoms joint venture in India.Mistry's office said in a statement that all decisions related to the dispute were taken with the unanimous approval of the Tata Sons board, and that of Tata family patriarch Ratan Tata, and Tata trustee N.A. Soonawalla."The insinuations are being imagined and this (DoCoMo) matter is sub-judice," said a Tata Sons spokesman, adding the company would not comment further on the matter.Mistry has been embroiled in a bitter public spat with Tata since his removal as chairman of the $100 billion steel-to-software group. In a leaked letter to the Tata board last week, Mistry criticised corporate governance practices and blamed Ratan Tata, who ran the company for over two decades and is now back as interim chairman, for some of its costliest missteps.
Tata Teleservices and DoCoMo have been locked in a long tussle over the Japanese company's move to exit a partnership formed in 2009. Under the terms of that deal, in the event of an exit, DoCoMo was guaranteed the higher of either half its original investment, or its fair value.When DoCoMo decided to get out in 2014, Tata was unable to find a buyer for the Japanese firm's stake and offered to buy the stake itself for half DoCoMo's $2.2 billion investment.India's central bank blocked Tata's offer, saying a rule change the previous year prevented foreign investors from selling stakes in Indian firms at a pre-determined price.
In an attempt to resolve the matter, Mistry said he asked DoCoMo to join the Tatas in seeking approval from the Reserve Bank of India (RBI), he said in his statement, but DoCoMo refused, and initiated arbitration in a London court.DoCoMo won that arbitration, and Tata was asked to pay a penalty of $1.17 billion, which it has deposited with the Delhi High Court. The issue is still under litigation.Ratan Tata is likely to seek help from the Indian government to resolve the DoCoMo issue, including seeking relaxed norms for paying the Japanese company, TV channel ET NOW said on Tuesday, citing unnamed sources.
India's Prime Minister Narendra Modi is scheduled to visit Japan this month and meet his Japanese counterpart Shinzo Abe in a bid to strengthen bilateral ties.Mistry said in his statement on Tuesday that Ratan Tata and Soonawalla had been kept informed throughout the DoCoMo proceedings, and had at all times approved what Tata Sons was doing.Asked to respond to Mistry's statement, Tata's lawyer Abhishek Manu Singhvi told CNBC-TV18: "It doesn't serve much purpose ... to keep making these allegations and counter allegations in the press." (Reporting by Aditi Shah and Abhirup Roy; Editing by Ian Geoghegan)
This story has not been edited by Firstpost staff and is generated by auto-feed.
First Published On : Nov 1, 2016 20:45 IST