Tata Chemicals’ Investments Caused Rs 2,000 Crore Impairments: Nusli Wadia
The company’s debt ballooned to Rs 8,695 crore from Rs 1,827 crore, according to Wadia.
Tata Chemicals Ltd. faced impairments to the tune of Rs 2,000 crore in ten years due to ill-advised investments, according to Nusli Wadia.
The company’s debt ballooned to Rs 8,695 crore from Rs 1,827 crore in the same period, Wadia wrote in his letter to shareholders ahead of the extraordinary general meeting which concluded in his removal from the company’s board of directors.
Wadia has already been voted out of the boards of Tata Steel Ltd. and Tata Motors Ltd.
The Brunner Mond Group Investment
The company’s Rs 800 crore investment in the Brunner Mond Group based in the U.K., Kenya and the Netherlands, led to an impairment of Rs 1,600 crore, said Wadia. He along with some other board members had expressed concerns about the move and doubted the rate of return as envisaged in the proposal.
The Haldia Plant Merger
Wadia added that he had opposed the merger of the Haldia plant (HLCL) with Tata Chemicals, which involved an investment of Rs 347 crore.
I had also expressed that Hind Lever Chemicals (HLCL) was managed by HLL (Hindustan Lever Ltd.), a reputed multinational, the scope for improvement would be negligible and the profitability should be assessed properly.Nusli Wadia’s December 23 Letter To Tata Chemicals Shareholders
Cross Holdings To Pare Debt?
Wadia also brought up the issue of Tata Chemicals' holdings in multiple Tata Group companies, which he estimates is worth around Rs 8,500 crore. Wadia alleged that instead of selling the cross-holdings and paring the debt on the books of the company, Tata Sons is maintaining the structure only to protect their voting rights.
It is for you, the shareholders of Tata Chemicals who own 70 percent of the shares of your company to decide whether you want to be the holder of Tata Sons shares with minimum return, zero liquidity and no exit.Nusli Wadia’s December 23 Letter To Tata Chemicals Shareholders
