Tata Tea, Soros Group Fall Out Over Loan To Haldia Petro

Tata Teas advance of Rs 11.89 crore for the Haldia Petroche-micals project may snowball into a major tussle between the Chatter-jee-Soros group and the Tatas. The Tatas are interested in recovering this amount either through principal repayment or conversion of the advance into equity.

The Tatas already hold a 10 per cent stake in the Rs 5,170-crore project through Tata Electric Companies and Telco. In case the Tatas advance is converted into equity, their stake in the project will rise further, necessitating re-adjustments in the equity structure. At the moment, the Chatterjee-Soros group, the West Bengal Industrial Development Corp and the Tatas hold equity in the ratio of 3:3:1.

 

The issue was addressed by Tata Tea chairman Ratan Tata in response to a question by a shareholder at the companys annual general meeting in Calcutta yesterday. The shareholder questioned a point in the annual report, which states: Steps are being taken to recover this sum and the management is confident of ultimate recovery thereof.

Tata said the company is trying to recover the loans through either of the two methods. The board of Haldia Petrochemical Ltd. has also discussed the issue at its meetings. Tata Tea had extended the loan to the project in 1995-96. At that time, the company was the joint promoter of the project. However, it later pulled out of the project.