MUMBAI: The axed chairman of Tata Sons has charged that there was an element of fraud in the conglomerate’s joint-venture deal in the setting up of AirAsia India.
Cyrus P Mistry was removed without notice as chairman of Tata Sons on Monday, and it has started a bitter war between him and interim chairman Ratan Tata, PTI reported.
Mistry has also alleged that due to Rata Tata’s passion for aviation, Tata Sons board increased capital infusion in the aviation sector at multiple levels of the initial commitment.
Tata Sons holds a majority stake in AirAsia India which started its air operations in June 2014.
In an angry five-page letter sent to the board members and trustees of Tata Sons, Mistry alleged that a fraudulent transaction of Rs 22 crore (RM13.6 million) had emerged after forensic investigation into the AirAsia deal, according to a IANS report.
“Board members and trustees are also aware that in the case of AirAsia, ethical concerns have been raised with respect to certain transactions as well as the overall prevailing culture with the organisation,” Mistry said. A copy of the letter is with IANS.
Mistry also called the board’s action against him “shocking” and “invalid”.
Mistry claimed executive trustee and board member of AirAsia India R Venkatraman, had considered these transactions “non-material” and it was only at the insistence of the independent directors, one of whom resigned, that a report was filed.
Mistry also implied that he was not happy with the decision on two aviation joint ventures – with AirAsia and Singapore Airlines.
“He (Tata) had concluded negotiations to partner with AirAsia and wanted the proposal tabled at the forthcoming Tata Sons board meeting. My pushback was hard but futile,” Mistry wrote.
A few months later, he wrote, “I was surprised to be confronted with a similar situation requiring me to execute a fait accompli JV with Singapore Airlines,” IANS reported.
In 2013, Tata Sons had joined hands with Malaysian carrier AirAsia and Arun Bhatia’s Telestra Tradeplace to start low-cost carrier AirAsia India.
The carrier had to wait for nine months before taking off, PTI reported.
Then, in September 2013, Tata group joined hands with Singapore Airlines to start a new full-service airline in India. Tata Sons owned 51 per cent stake in the carrier named Vistara.