Accusing the board of "wrongful dismissal", ousted Tata Sons' chairperson Cyrus Mistry said the conglomerate faced $18 billion (Rs 1.15 lakh crore) in write downs or reduction in value of assets, Bloomberg reported. The statements were reportedly made in a letter to the group's board, but Tata Sons and Mistry declined to comment it, according to Bloomberg.
The Securities and Exchange Board of India will seek a report from the company regarding the allegations Mistry made in his letter. A Sebi official has said, "We are taking note of each and every development and will act immediately if there is any hint of possible violation of corporate governance and listing norms or any other regulation under our jurisdiction."
Mistry's letter said he had inherited "debt-laden" ventures of Indian Hotels Co, Tata Motors Ltd’s passenger-vehicle operations, Tata Steel Ltd’s European business, and part of the group’s power unit and its telecommunications subsidiary during his tenure as chairperson.
The ousted chairman had proposed the scrapping of the "unprofitable" Nano project, which was the brainchild of the conglomerate's interim director Ratan Tata. The letter states, "As there is no line of sight to profitability for the Nano, any turnaround strategy for the company requires to shut it down. Emotional reasons alone have kept us away from this crucial decision.”
On October 24, the board decided to push Mistry out after a massive fallout, with Tata’s shares falling and the company anticipating legal action by the former executive. Ratan Tata has taken over Mistry’s post temporarily, the company said.
The Tatas had filed caveats seeking a notice from Mistry "fearing legal action" against their move to dismiss him from the post after four years. A caveat is a preventive measure that disallows courts from hearing matters without both parties being notified about them first.