Boardroom war: Tata Sons denies undue benefit for Mehli Mistry

The petition claimed Tata Sons had requested Tata Power to provide details of contracts

Tata Sons has refuted allegations that Mehli Mistry and associates benefited from contracts allegedly awarded to him by Tata Power without competitive bidding.

The petition, filed by Tata Sons with the National Company Law Board (NCLB) in response to petitions by former chairman Cyrus Mistry and his family’s companies, claimed Tata Sons had requested Tata Power to provide details of contracts awarded to Mehli Mistry and his companies. According to the petition, “requisite processes in awarding of the contracts, and necessary approval from the board/committee(s)/management was taken as required as per the schedule.” 

It also said the reference to the growth in Mistry’s companies’ reserves between the 1994-95 and 2014-15 was unsubstantiated and lacked any evidence. “There are at least 1,400 listed companies that have clocked a higher percentage of turnover and profits than Mehli Mistry’s companies during a comparative period,” the petition said. 

As far as competitive bidding was concerned, it said the Sea Freight for Trombay Contract in 2006 was granted through a competitive bidding process and requisite approvals were also obtained.  

In the bidding process, five parties — Torvald Klaveness, NYK Bulkship, Daiichi Chou Shipping, Noble Pacific, and M Pallonji Shipping and Mercator Lines — had taken part. 

“It was clear that the petitioners have made false claims only in order to unfairly prejudice this tribunal against Ratan Tata, when as a matter of fact the commercial dealings impugned above are beyond any reproach, either factually or legally,” said the petition. 

A dredging contract in 1993 had other vendors such as S K Dhondi, Sunder Underwater and M Pallonji and Company Private Limited. 

The petition refuted the “endorsement” of Mistry by independent directors of certain listed Tata group companies, saying the fact that independent directors of some group companies were supporting Mistry in no way invalidated the collective decision of the board of directors of Tata Sons to remove him as the chairman of the group.

Investigations into Rs 22 crore fraud in Air Asia, revealed after a forensic audit by Deloitte, showed involvement of non-existent parties in India and Singapore. While admitting the findings, Tata Sons, clarified that alleged fraudulent transactions were entered into and executed at the instance of the former chief executive of AirAsia India. It further said that the boards of directors of Air Asia India were neither aware of nor authorised to enter into of the alleged fraudulent transactions.

On the allegations with respect to proceedings at the board meeting of Tata Global Beverages Limited, Tata Sons’ petition said that Mistry’s removal followed the process which was completely in accordance with the provisions of the Act read with the Articles of Association of the company. 

The petition said, “The minutes of the meeting fully and fairly record the proceedings of the meeting including recording the objections of Mistry as also the objections of Analjit Singh and Darius Pandole, it said. While the allegation related to the non-recording of the audio and video of the board meeting, the petition claims that there was a systemic failure as a result of which the proceedings at the meeting did not get recorded.”