Cyrus Mistry in a letter to Tata board has levelled charges of corporate misgovernance and irregularities
Mumbai:
In his detailed takedown of Ratan Tata in an email sent to the board of Tata Sons, sacked chairman Cyrus Mistry highlights ethical and financial concerns in the airlines that are partly owned by India's largest conglomerate.
Mr Mistry, who was abruptly removed on Monday, four years after he replaced Mr Tata, talks of "fraudulent transactions of R. 22 crores involving non-existent parties in India and Singapore" in the case of Air Asia.
In 2013, the Tata Group announced its joint venture with Air Asia, the budget airline based in Malaysia. In India, the airline places four among budget carriers after IndiGo, SpiceJet, GoAir.
Mr Mistry says that soon after he took over from Mr Tata as the group's top boss, he was told by his predecessor that the deal with Air Asia had been finalized. "My pushback was hard but futile," he says, underscoring that the group's patriarch excluded him from crucial negotiations. Soon after the Air Asia tie-up, he says, "I was surprised to be confronted with a similar situation requiring me to execute a fait accompli JV with Singapore Airlines." Tata Sons owns 51% of Vistara, the airline birthed by that partnership.
Mr Mistry says that attempts made by him to cut debt and loss-making businesses were waylaid by Mr Tata, who, he suggests, interfered constantly despite an early promise to take a backseat after Mr Mistry's appointment. Blaming Mr Tata's " passion for the airlines sector", he says the 78-year-old pushed for the group to invest much more in its airlines than planned.
Mr Mistry also says that when it became clear that Air Asia was party to financial irregularities, a shareholder who is on the board of Air Asia "did not encourage further study" and that a police case or FIR was filed reluctantly by the group only after two independent directors insisted on it and one of them resigned in protest.
Civil Aviation Secretary R N Choubey said the government has so far received no actionable information. "We are waiting for any input from any quarter; we have not received anything so far," he said.
Air Asia's license to operate in India has been challenged in court by an industry association that alleges the venture has violated foreign investment laws by covertly giving more stake than permissible to the Malaysian partner.
Civil Aviation Minister Ashok Gajapati Raju told NDTV that all permissions were granted in accordance with the policies that existed at the time. "If there are violations in it, the courts are there to look at it," he said.
Mr Mistry, who was abruptly removed on Monday, four years after he replaced Mr Tata, talks of "fraudulent transactions of R. 22 crores involving non-existent parties in India and Singapore" in the case of Air Asia.
In 2013, the Tata Group announced its joint venture with Air Asia, the budget airline based in Malaysia. In India, the airline places four among budget carriers after IndiGo, SpiceJet, GoAir.
Mr Mistry says that soon after he took over from Mr Tata as the group's top boss, he was told by his predecessor that the deal with Air Asia had been finalized. "My pushback was hard but futile," he says, underscoring that the group's patriarch excluded him from crucial negotiations. Soon after the Air Asia tie-up, he says, "I was surprised to be confronted with a similar situation requiring me to execute a fait accompli JV with Singapore Airlines." Tata Sons owns 51% of Vistara, the airline birthed by that partnership.
Mr Mistry says that attempts made by him to cut debt and loss-making businesses were waylaid by Mr Tata, who, he suggests, interfered constantly despite an early promise to take a backseat after Mr Mistry's appointment. Blaming Mr Tata's " passion for the airlines sector", he says the 78-year-old pushed for the group to invest much more in its airlines than planned.
Mr Mistry also says that when it became clear that Air Asia was party to financial irregularities, a shareholder who is on the board of Air Asia "did not encourage further study" and that a police case or FIR was filed reluctantly by the group only after two independent directors insisted on it and one of them resigned in protest.
Civil Aviation Secretary R N Choubey said the government has so far received no actionable information. "We are waiting for any input from any quarter; we have not received anything so far," he said.
Air Asia's license to operate in India has been challenged in court by an industry association that alleges the venture has violated foreign investment laws by covertly giving more stake than permissible to the Malaysian partner.
Civil Aviation Minister Ashok Gajapati Raju told NDTV that all permissions were granted in accordance with the policies that existed at the time. "If there are violations in it, the courts are there to look at it," he said.
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