Mumbai: Indian stock exchanges BSE and NSE on Wednesday sought clarification from Tata group’s leading listed firms on startling disclosures Tata Sons’ ousted Chairman Cyrus P Mistry made in a letter to its directors.
“The Exchange has sought clarification from the company with respect to news article appearing on Bloomberg on October 26, 2016 titled ‘Ousted Tata chief says group faces $18 billion in write downs,” said Tata group’s firms Tata Motors, Tata Steel, India Hotels, Tata Teleservices and Tata Power in their regulatory filing.
Accusing directors of wrongfully dismissing him on Monday, the 49-year-old Mistry said $103-billion Tata group potentially faces a whopping Rs 118,000 crore ($18 billion) write down over time due to five unprofitable businesses he inherited.
“The capital employed in these companies had risen from Rs 132,000 crore to Rs 196,000 crore, due to operational losses, interest and capex. This figure is close to the networth of the group, which is at Rs 174,000 crore,” Mistry said in a stormy letter to the Tata Sons board and the group’s trustees.
The companies Mistry mentioned and from whom BSE and NSE sought response to his letter are India Hotels, Tata Motors, Tata Steel Europe, Tata Power Mundra and Tata Teleservices. “If so, you are advised to provide the said information along with the sequence of events in chronological order and the material impact of this article on the company,” the exchanges said.
In a dramatic move, the Tata Sons group brought back its former Chairman Ratan Tata in an interim capacity.
Market watchdog Securities Exchange Board of India is also reported to be looking into Mistry’s disclosures to verify if there was any breach of corporate governance, violation of listing norms and regulations by the Tata group or its listed firms and financial or other irregularities.
