Mistry’s war of words with Tatas escalates; says 'mischievous' to suggest he acted on his own on Docomo deal

The battle between Tata Sons and Cyrus Mistry is not going to end soon as it is just getting murkier. Now, Mistry has dismissed accusation levelled by Tatas that he acted on his own regarding the Docomo deal, without informing the Tata Board.

Mistry, in a statement, said it was 'false and mischievous' to suggest that he acted on his own or without the knowledge of Ratan Tata on the Tata-Docomo matter.

“Insinuations that Docomo issue was handled in a manner inconsistent with Tata culture and values are baseless,” the statement from Mistry’s office read.

Mistry said all the decisions regarding the Docomo deal was taken after the approval of Ratan Tata and Tata Sons Board.

" The suggestion that Ratan Tata and the trustees would not have approved of the manner in which the litigation was conducted is contrary to what transpired," the statement said.

Stating that a number of discussions on the Docomo situation had been held in the Tata Sons board, the statement added: "Mistry had always mentioned that the Tatas should honour all commitments within the law. This stance is based on Tata Sons' board view and was always consistent with the series of board meetings in which the Docomo issue was discussed."

Tata Group is entangled in a legal tussle with Japanese firm, NTT DoCoMo. DoCoMo had in November 2009 acquired 26.5 per cent stake in Tata Teleservices for about Rs 12,740 crore (at Rs 117 per share) with an understanding that in case it exits the venture within five years, it will be paid a minimum 50 per cent of the acquisition price.

DoCoMo, in April 2014, decided to exit the joint venture that struggled to grow subscribers quickly and sought Rs 58 per share or Rs 7,200 crore from the Tatas.

But the Indian group offered Rs 23.34 a share in line with RBI guidelines that states that an international firm can only exit its investment at a valuation "not exceeding that arrived at on the basis of return on equity".

The Japanese firm then dragged the Tatas to international arbitration where it won a $1.17 billion award.

"Nevertheless, the Tatas applied to RBI for approval. Since RBI approval was not forthcoming, Docomo initiated arbitration. The award was passed in favour of Docomo and against the Tatas," the statement added.

Tatas did not challenge the award in the UK. On the contrary, RBI was approached once again by the Tatas for permission to pay the amount awarded. RBI again refused permission, the statement said.

"When Docomo sought enforcement of the award in the Delhi High Court, in order to show their bonafides, Tatas deposited a sum in excess of Rs 8,000 crore in court," it added.

Insisting that Tata and NA Soonawala, Trustee, were kept informed throughout the process, the statement said they even participated in separate meetings held with Mistry.

"They also participated in the meeting with the legal counsel (who also happened to be a trustee of the Dorabji Tata trust) and who represented Tatas in the litigation. At all times, Ratan Tata and Soonawala concurred and approved the course of action adopted by the Tatas and as advised by legal counsel," it said.

"In light of the above facts, to suggest that Mr Mistry acted on his own, or contrary to 'Tata values', or without the knowledge and/or concurrence of Ratan Tata and Soonawala is as false as it is mischievous," the statement by his office added.