Ratan Tata, Venkat had no vested interests at AirAsia India: Tata counsel

Cyrus Mistry had alleged that fraudulent transactions worth Rs 220 mn had taken place at the group's aviation venture

Tata Sons’ counsel in his argument at the National Company Law Tribunal (NCLT) on Thursday strongly refuted allegations by Cyrus Mistry, former chairman of Tata Sons, and his family investment firms, in their petition against Ratan Tata, chairman of Tata Trusts and R Venkatramanan, director, AirAsia India and latter’s involvement in the wrongdoings at the group's aviation venture.

Abhishek Manu Singhvi, Tata Sons’ counsel, also added that there was no record for Cyrus Mistry to make allegations against Venkatramanan and Ratan Tata on being beneficiaries of the Rs 220-million fraud in AirAsia or that Ratan Tata was involved in funding terrorism. "The filings amounted to perjury and Tata would consider the same," Singhvi told the packed courtroom at the NCLT on the tenth day of the hearing.

“Please show the source of belief,” the judge BSV Prakash Kumar hearing the matter asked Aryama Sundaram, Mistry’ scounsel. In his response, Sundaram said, “I will deal with it in my rejoinder.”

Tony Fernandes-promoted AirAsia Bhd, through AirAsia Investment, owns 49% in AirAsia India. The Tata Group owns 49%, and two directors of AirAsia India—S Ramadorai and R Venkatramanan—hold the rest. After his removal as the chairman of Tata Sons, Mistry, in an e-mail, had alleged that fraudulent transactions worth Rs 220 million had taken place at the group's aviation venture and accused Venkatramanan of having tried to cover it up as he had vested interests.

Substantiating his arguments with the minutes of Tata Sons and Air Asia’s board meetings since 2012 – the year when Fernandes made presentation to the Tata Sons board on the proposed airline venture, Abhishek Manu Singhvi, Tata Sons’ counsel argued that all that Air Asia India, as well as Tata Sons’ board, had engaged Deloitte to conduct a forensic  audit on AirAsia’s account in April  2016 itself – much before concerns with regard to corporate governance issues at AirAsia India were flagged by Bharat Vasani, nominee-director of Tata Sons on the AirAsia India board. "Deloitte report had already indicated legal action was required even before Mistry brought it up –the board would have worked in normal course with or without Mistry’s allegation," pointed out Singhvi.

Singhvi said most of the decisions with regard to AirAsia India, including the additional funding, were taken after consultation with the board of Tata Sons and AirAsia India board and Mistry as chairman of Tata Sons was fully involved in them.  “It is being made to be seen as a case of oppression and mismanagement. It became a problem only after his departure,” said Singhvi, referring to Mistry.

In his submissions to the NCLT on 11th January, Sundaram had alleged that Vasani, through an e-mail, complained to Mistry that the directors of Air Asia India, including Venkatramanan, were approving party transactions without scrutinising any details or vetting the commercial terms. Sundaram had said AirAsia India has been a cause of serious oppression of any prejudice to the interests of shareholders of Tata Sons. Sundaram, while citing the e-mail exchanges between Vasani and Mistry, said the latter sounded repeated warnings about the goings-on at the airline, alleging that these pieces of evidence show the rampant and gross governance failures.

“This is the most scurrilous level of an allegation in a draft petition. It shows the mind of a disgruntled person and casts doubts on all the other allegations. Hence every other thing should be taken in not with the pinch of salt but a bucketful of salt,” Singhvi said as his concluding arguments for the day.