Tata Steel issues clarification, says financial statements present true and fair value

Responding to Cyrus Mistry's $18 billion writedown warning for Tata Group, Tata Steel informed the Bombay Stock Echange that its value of assets tested for impairment were as per norms.

The Tata Group in a written admission to SEBI said  its financial statements present a true and fair value of the company, in response to a request for clarification from India's stock exchanges.

SEBI had sought a clarification from the Tata Group after Mistry’s revelations about the phenomenal write downs in store for the Tata group. The Tata group in a written reply to SEBI ‘s email stated that, “The financial statements of the company are prepared on a going concern basis and present a true and fair value of the state of affairs of the company. The value in use of assets has been tested for impairment as per accounting standards.”

Mistry had alleged that the Tatas face the $18 billion write down in five of their businesses. It includes hotels, steel, automotive, power and telecommunications businesses of the group. Mistry had termed these businesses as legacy hotspots and had hinted that they were rotten from the time he was appointed as chairman of the Tata group.

Mistry had shocked everyone when he claimed in his letter that the much admired Nano car project of the Tata group should be scrapped as it was bleeding money. Mistry had further panned the group’s strategy for making unwise business decisions in the hotel industry including buying hotels at inflated prices that severely dented the company’s finances. Mistry had also panned the group for overbidding for the Mundra power project that was dependent on low cost Indonesian coal.

Mistry’s allegations have set the bells ringing in SEBI which fears that a massive $18 billion write down could severely impact the interest of the group’s shareholders. This forced SEBI to write an email to the Tata group to which it responded today. Tata further said in its letter to SEBI, “The company in compliance with SEBI regulations disseminates its quarterly results to stock exchanges and to wider shareholders.”

TATA letter