Tata group fields former honchos FC Kohli, Muthuraman to counter Mistry's allegations
Mistry said the Tata group was never in favour of selling TCS and it was Ratan Tata's intention to exit the software company
There seems to be no let up in the ongoing corporate tussle between Ratan Tata and Cyrus Mistry. A day after Mistry, who was sacked as Tata Sons chairman, sent a missive saying Tata had in 1990s planned to sell TCS, the Tata camp has rebuked the charges. TCS is the group's most profitable company.
In order to prove Mistry's charges wrong, the Tatas have roped in retired bosses, including the 92-year-old former chief executive and deputy chairman of Tata Consultancy Services F C Kohli. Kohli refuted Mistry's charges that Tata was seeking to sell TCS to IBM, its joint venture partner in 1991-92.
“Cyrus Mistry’s comments regarding the sale of TCS to IBM at some ‘unspecified point in time’ are not correct. I was actively involved in the decision to bring IBM to India. A joint venture (JV) for hardware manufacturing and support in India, Tata IBM, was set up in 1991-92. This JV was undertaken to promote the computer hardware industry in India, which was non-existent at that time,” the Business Standard report said quoting Kohli.
Kohli further added that the group never had any intention of selling TCS to IBM, the BS report added.
In his reaction, Mistry said the Tata group was never in favour of selling TCS and it was Ratan Tata's intention to exit the software company.
A day before, Mistry in his letter had described the episode as a “near-death experience for TCS at the hands of Mr Ratan Tata”, the Economic Times report said.
Mistry had alleged that Ratan Tata had then approached J R D Tata following a proposal from IBM to buy out TCS. This was when Kohli was hospitalised with a cardiac condition. However, Kohli clarified that his bypass surgery had taken place in 1984 and not in 1990s as mentioned by Cyrus.
Mistry had also alleged that Tata's decision to acquire European steel maker Corus at a considerably high price of $12 billion in 2007 was reckless. According to Cyrus, Corus was available at half the price just a year back, but Tata went ahead despite differences and reservations over the deal.
Countering Mistry's claims, B Muthuraman, former vice-chairman and managing director of Tata Steel, termed the allegations “frivolous and unconsidered”. He said the Corus acquisition was based on Tata Steel's long-term strategy to grow through capacity expansion in India and through acquisitions overseas, the BS report said.
“The long-term strategy of Tata Steel was well thought out after a lot of deliberation to grow the company through capacity expansion in India and internationally through inorganic growth,” the ET report said quoting Muthuraman.
“Following the successful acquisition of NatSteel in Singapore and Millennium Steel in Thailand, Corus Group plc provided a natural fit for the portfolio especially since the Netherlands facilities which is the gold standard in competitive positioning were part of the asset perimeter." Muthuraman said.
Even as Mistry continues to allege several wrongdoings in the group and during Ratan Tata's tenure as chairman, the holding company Tata Sons has called for EGMs of several group company including TCS, Tata Chemicals and Indian Hotels Corp to seek shareholder votes to evict Mistry from their boards, the ET report added.
Market roundup: Sensex ends 54.8 points up by closing bell, Nifty at 17,369; today's top gainers and losers
The top gainers on BSE Sensex were Bharti Airtel, Nestle India, Tata Steel, Bajaj Finserv, and HCL Tech. The top losers were Titan, Utlracem Co, Bajaj Auto, HDFC Bank, and Axis Bank
The top gainers on BSE Sensex were Kotak Bank, Titan, NTPC, Sun Pharma and Axis Bank. The top losers were Nestle India, Maruti, Bajaj Finserv, Bajaj Auto and TCS
While the Sensex gained 417.96 points to end at 59,141.16, Nifty went up by 110.05 points to end at 17,629.50.