You Knew It All, Says Cyrus Mistry To Ratan Tata
Cyrus Mistry rebuts Ratan Tata’s claim on lack of disclosure of Welspun transaction
Former Chairman of Tata Sons, Cyrus Mistry has said that the group’s interim chairman Ratan Tata is justifying Monday's conduct by making vague public statements that are contrary to his knowledge and contrary to the records of the Tata Group.
Mistry’s office said this in a statement released to the media on Friday late evening while rebutting the claim that the trustees of Tata Trusts were not kept informed about Tata Power’s acquisition of renewable energy business of Welspun group.
Tata Power’s Renewable Energy Acquisition
The statement said that earlier this year, Tata Power made a presentation to Tata Sons that a significant focus area would be the renewables sector, which was appreciated by the Tata Sons board. At the end of May 2016, the Tata Sons board circulated a note to all its members on a proposed transaction to acquire the renewables business of Welspun Renewables Energy for Rs 9,249 crore.
“On May 31, 2016, a note was circulated to the board of Tata Sons and to Mr. Ratan Tata (he was sent all board notes as Chairman Emeritus) providing information about the proposed Welspun transaction, and asking them if they needed any further information.”
Mistry claims the only board member to respond to the note was Tata Trusts’ nominee on the Tata Sons board, Vijay Singh, who expressed ‘positive appreciation’. The statement said in the absence of any response from any other director, Tata Power executed a agreement on June 12, 2016.
Ratan Tata Was Briefed
Mistry said Ratan Tata and NA Soonawala. former board member of Tata Sons and presently a trustee at Tata Trusts were briefed on the transaction.
A series of discussions took place in the presence of Ratan Tata, in his capacity as Chairman Emeritus and trustee, N.A. Soonawala, trustee of some Tata Trusts. These included much more detailed interaction with the merchant bankers to the transaction.Cyrus Mistry, Former Chairman, Tata Sons
Mistry reveals that Soonawala had strong views on how this Tata Power should structure the transaction and proceeded to have further meetings with the merchant banker.
Tata Sons Board Approved The Deal
Mistry claims that since funding for the transaction required shareholder approval, the transaction was discussed again at a meeting of the Tata Sons board on June 30, 2016, in which Anil Sardana, the managing director and chief executive officer of Tata Power made a detailed presentation to the board. The board of Tata Sons approved the transaction after discussing all aspects of the transaction including the deal structure.
Did Mistry Inform Tata Sons Late?
Mistry’s statement said as per the minutes of the Tata Sons board meeting, the proposal was approved by nominee directors Nitin Nohria and Vijay Singh "after discussing the proposal with Mr. Tata and Mr. Soonawala". The statement says the minutes pointed out that the nominee directors while reiterating their view on the the proposal expressed that this proposal should have come to the trustees earlier. As per the Articles of Association amended on April 9, 2014, the majority of the Trusts nominee directors on the board of Tata Sons require to vote in ‘affirmative’ for any resolution to be approved.
Mistry’s office says for Tata Group to suggest that the, “Tata Sons board including the nominee directors of the Tata Trusts had not been adequately informed is contrary to the factual record”.
