Wednesday, October 26, 2016

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Reduced to being 'lame duck' chairman: Cyrus MistryDown and out: Cyrus Mistry. AFP photo

Reduced to being 'lame duck' chairman: Cyrus Mistry

26 Oct 2016 | 8:23 PM

MUMBAI: Cyrus Mistry, the dismissed former chairman of Tata Group, has claimed he was relegated to the position of a "lame duck" head of the group.

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Mumbai, October 26

Cyrus Mistry, the dismissed former chairman of Tata Group, has claimed he was relegated to the position of a "lame duck" head of the group.

In an explosive confidential email to Tata Sons board members, Mistry has accused them of replacing him as chairman of India's largest conglomerate without so much as a word of explanation and without affording him an opportunity to defend himself.

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"I was shocked beyond words at the happenings at the board meeting of October 24, 2016. Apart from the invalidity and illegality of the business that was conducted, I have to say that the Board of Directors has not covered itself with glory.”

(Read: SEBI looking into Tata-Mistry saga; bourses seek clarification)

"To 'replace' your Chairman without so much as a word of explanation and without affording him an opportunity of defending himself, in a summary manner must be unique in the annals of corporate history," he wrote in the email on October 25 which was circulated widely to the media today.”

Attempts to get a response from Tata Sons on Mistry's charges failed.

Mistry said he was promised a free hand when he was appointed chairman in December 2012 but Articles of Association were modified, changing the rules of engagement between the Tata family Trusts and the Board of Tata Sons.

Stating that he inherited problems, he went on to raise corporate governance issues alleging representatives of family trusts, which hold two-thirds of Tata Sons shares, were reduced to "mere postmen" as they left board meetings midway to "obtain instructions from Mr. (Ratan) Tata."

In clear signs that not all was well between him and his predecessor, he said Tata’s loss-making Nano car project that consistently lost money but could not be shut down for "emotional reasons" and because it would have stopped the supply of Nano gliders to an electric car making entity where Tata had stake.

He alleged that it was Tata who forced the Group to foray into the aviation sector by making him a 'fait accompli' to joining hands with Air Asia and Singapore Airlines and making capital infusion higher than initial commitment.

Also, "ethical concerns" had been raised over certain transactions and a "recent forensic investigation revealed fraudulent transactions of Rs 22 crore involving non-existent parties in India and Singapore", he wrote.

He warned that the salt-to-software giant may face Rs 1.18 lakh crore in writedowns because of five unprofitable businesses he inherited.

Defending his record, Mistry said he inherited a debt-laden enterprise saddled with losses and went on to single out Indian Hotels Co, passenger-vehicle operations of Tata Motors, European operations of Tata Steel and part of the group's power unit and its telecommunications subsidiary as "legacy hotspots".

He said the suddenness of the action, and the lack of explanation has led to all manner of speculation and has done immeasurable harm to his reputation as well as that of Tata Group.

"I cannot believe that I was removed on grounds of non- performance," he said going on to point to two directors, who voted for his removal, only recently lauding and commending his performance.

Detailing the problems he inherited in several Tata group firms, Mistry in his letter said the foreign acquisition strategy with the exceptions of JLR and Tetley, had left a large debt overhang.

 “The European steel business has potential impairments in excess of $10 billion, only some of which has been taken as of date. Many foreign properties of IHCL and holdings in Orient Hotels have been sold at a loss. The onerous terms of the lease for Pierre in New York are such that it would make it a challenge to exit," he said.

Tata Chemicals still needs tough decisions about its UK and Kenya operations, he added.

Mistry also hit hard on the group's hospitality arm IHCL, saying beyond flawed international strategy, it had acquired the Searock property at a highly inflated price and housed in an off-balance sheet structure.

"In the process of unraveling this legacy, IHCL has had to write down nearly its entire net worth over the past three years. This impairs its ability to pay dividends," he said.

Tata Capital had a book that required clean up on account of bad loans to the infrastructure sector, he added.

Highlighting the problems faced by the group's telecom business, Mistry said: "Of all the companies in the portfolio, the telecom business has been continuously hemorrhaging. If we were to exit this business, via fire sale or shut down, the cost would be $4-5 billion. This is in addition to any payout to Docomo of at least a billion plus dollars".    

He also hit out at the original structure of the Docomo transaction, saying it "raises several questions about its appropriateness from a commercial or prudential perspective within the then prevailing Indian legal framework".

In light of all this, Mistry said "our strategy over the past three years has been to increase the EBIDTA from Rs 400 crore to Rs 2,500 crore in the hope of being a potential player in consolidation of the industry". On Tata Power, he said the company aggressively bid for the Mundra project based on low-priced Indonesian coal but as regulations changed, "the losses in 2013-14 alone amounted to Rs 1,500 crore".

"Given that Mundra constitutes Rs 18,000 crore of the capital employed (40 per cent of the overall company's capital employed) this substantially depresses the return on capital for Tata Power as well as carries the risk of considerable future impairments," he said in the letter.

Turning to Ratan Tata's pet project Nano, Mistry said the product development concept called for a car below Rs 1 lakh but the cost were always above this and it had "consistently lost money, peaking at Rs 1,000 crore".

"As there is no line of profitability for the Nano, any turnaround strategy for the company (Tata Motors) requires to shut it down. Emotional reasons alone have kept us away from this crucial decision," he said.

Mistry further said: "Another challenge in shutting Nano is that it would stop the supply of the Nano gliders to an entity that makes electric cars and in which Mr Tata has a stake." — PTI

CBI court acquits Yeddyurappa, sons in mining bribery case

CBI court acquits Yeddyurappa, sons in mining bribery case

26 Oct 2016 | 1:28 PM

BENGALURU: In a huge relief to senior BJP leader and former Karnataka chief minister BS Yeddyurappa, a special CBI court here on Wednesday acquitted him along with his two sons and son-in-law in a Rs 40-crore kickbacks case related to illegal mining. The case had cost Yeddyurappa his chief ministership in 2011.

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26 Oct 2016 | 3:08 PM

NEW DELHI: After the speculation on Navjot Sidhu joining the Congress, Punjab Dy CM Sukhbir Badal said Sidhu is a “human bomb” and “would explode once he entered the Congress”.

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26 Oct 2016 | 7:09 PM

NEW DELHI: A new ‘blacklisting’ policy that will remove the dichotomy between tackling corruption in defence deals and having a method to deal with foreign companies who pay bribes, the Ministry of Defence (MoD) has decided to do away with having a system of ‘blanket blacklisting’.

Sidhu to be tried for wrongdoings during 2009 elections: SC

Sidhu to be tried for wrongdoings during 2009 elections: SC

26 Oct 2016 | 6:34 PM

NEW DELHI: The Supreme Court on Wednesday directed Navjot Singh Sidhu face trial for the charge of having taken the help of a state government official for his campaign for the 2009 general elections.

Nightingale of Kashmir, legendary singer Raj Begum dies at 89

Nightingale of Kashmir, legendary singer Raj Begum dies at 89

26 Oct 2016 | 7:43 PM

SRINAGAR: Legendary Kashmiri singer Raj Begum, the voice that mesmerized millions for over seven decades, died here on Wednesday, family sources said. She was 89.

Akhilesh Yadav meets Governor, briefs him on political situation in UP

Akhilesh Yadav meets Governor, briefs him on political situation in UP

26 Oct 2016 | 3:47 PM

LUCKNOW: Amid a bitter power struggle in the ruling Samajwadi Party, UP CM Akhilesh Yadav on Wednesday met Governor Ram Naik and briefed him on the prevailing political situation in the state.

Another FIR against AAP MLA Amanatullah; now for threatening people

Another FIR against AAP MLA Amanatullah; now for threatening people

26 Oct 2016 | 12:04 PM

NEW DELHI: Already in custody for allegedly threatening a woman, another complaint has been lodged against AAP MLA Amanatullah Khan for allegedly threatening a group of people.

India trying to create ‘chaos' in Pakistan, alleges  Imran Khan

India trying to create ‘chaos' in Pakistan, alleges Imran Khan

26 Oct 2016 | 10:19 AM

LAHORE: After 61 people were killed in in Quetta, Pakistan Tehreek-i-Insaf chairman Imran Khan has lashed out at India for trying to “implode” Islamabad under a new “doctrine”.

Kidnapped 7-year-old boy rescued; four arrested

Kidnapped 7-year-old boy rescued; four arrested

26 Oct 2016 | 6:12 PM

PATIALA: Patiala police on Wednesday rescued the 7-year-old boy who was kidnapped from outside him house in Manjit Nagar area of the city. Four persons have been arrested.

Budget advanced by a month: PM

Budget advanced by a month: PM

26 Oct 2016 | 8:34 PM

NEW DELHI: Prime Minister Narendra Modi said on Wednesday that the Union Budget was being advanced by a month to “speedier implementation of schemes”.

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NZ promises ‘constructive’ approach on NSG bid, but remains vague on support

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26 Oct 2016 | 7:20 PM

NEW DELHI: India and New Zealand on Wednesday agreed to strengthen ties in key areas of trade, defence and security during talks between Prime Minister Narendra Modi and his Kiwi counterpart John Key, who also assured that his country will contribute "constructively" to the process currently underway in the NSG to consider India's membership.


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26 Oct 2016 | 1:32 AM

Chandigarh: Getting property registered will soon become easier as the UT Sub-Registrar’s office is ready with a new system of online appointment for residents. Under the new system, all records of properties have been linked with the Estate Office records.

NoParkash Badal. File photo

Badal announces 100 cr grant for burial grounds; calls Capt, Kejriwal ‘paper tigers’

26 Oct 2016 | 6:59 PM

DERA BABA NANAK: Chief Minister Parkash Singh Badal has announced a grant of Rs 100 crore for constructing and maintaining burial grounds for Christians and Muslims.


AAP to go the PPP way, says Swaraj Abhiyan leader Yogendra Yadav

26 Oct 2016 | 8:33 PM

CHANDIGARH: Swaraj Abhiyan leader Yogendra Yadav said the AAP that at one time had emerged in Punjab as a force to reckon with was fast declining and would go the PPP way.


Use of drugs in polls serious concern: CEC

26 Oct 2016 | 1:39 AM

CHANDIGARH: As all opposition parties are apprehending the large-scale use of drugs and liquor during the Assembly elections scheduled early next year, Chief Election Commissioner (CEC) Dr Nasim Zaidi today said the issue had “engaged the commission’s very serious attention.

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Shortage of doctors ails health services

Shortage of doctors ails health services

26 Oct 2016 | 12:51 AM

CHANDIGARH: Shortage of doctors continued to ail the health services in the state during the two years of the Manohar Lal Khattar-led BJP government in the state.

Virbhadra Singh can’t question CBI, Delhi HC told

Virbhadra Singh can’t question CBI, Delhi HC told

26 Oct 2016 | 7:34 PM

NEW DELHI: The CBI on Wednesday contended in the Delhi High Court that Himachal Pradesh Chief Minister Virbhadra Singh should face the charge of holding disproportionate assets, instead of questioning the agency’s authority for conducting the probe and filing the chargesheet in the case.

Pant faces rival for ticket from P’garh

26 Oct 2016 | 12:20 AM

PITHORAGARH: Suresh Joshi, a senior BJP leader, has sought the party ticket from the Pithoragarh Assembly seat, claiming he deserves it in return for his years of efforts to set up a strong base for the party here.

Islamic State holds up Iraqi army south of Mosul

Islamic State holds up Iraqi army south of Mosul

26 Oct 2016 | 8:09 PM

QAYYARA/BAGHDAD: Islamic State fighters on Wednesday kept up their fierce defence of the southern approaches to Mosul, which has held up Iraqi troops on the southern front and forced an elite army unit east of the city to put its more rapid advance on hold. Ten days into the offensive, Iraqi army and federal police units are trying to dislodge the militants from villages in the region of Shora, 30 km (20 miles) south of Iraq's second largest city.

India ranks 130 in World Bank ‘Doing Business’ list

26 Oct 2016 | 7:04 PM

NEW DELHI: India may be one the the world’s fastest growing economy, but it still ranks 130 in World Bank’s ‘Doing Business 2017’ list. India was ranked the same last year among 190 economies, but the ranking has now been revised to 131, making this year’s ranking only slightly better.

NoNew Zealand’s Ross Taylor plays a shot as Mahendra Singh Dhoni looks on. AFP photo

Spinners restrict New Zealand to 260 for 7

26 Oct 2016 | 5:44 PM

RANCHI: Martin Guptill struck a fluent half-century but New Zealand failed to seize the momentum as Indian spinners did well to restrict them to a modest 260 for 7 in the penultimate ODI cricket match of the five-match series here on Wednesday.


India in a happy place — Ranchi

26 Oct 2016 | 1:31 AM

RANCHI:After taking a 2-1 lead in the five-match ODI series, hosts India will aim to pocket the series when they take on New Zealand in the fourth game at the JSCA International Stadium on Wednesday.

Sports Ministry alleges forgery by AITA in poll procedure

26 Oct 2016 | 1:31 AM

NEW DELHI: The Sports Ministry has alleged that All India Tennis Association (AITA) “forged” the Ministry’s stamps and signatures, and declared its elections, held last month in Indore, invalid.

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