Ratan, Soonawala were in the loop on DoCoMo: Cyrus Mistry

Cyrus Mistry said on Tuesday he had kept Tata Sons interim Chairman Ratan Tata and Tata Trusts trustee N A Soonawala informed on the litigation with NTT DoCoMo over the latter’s exit from their loss-making joint venture, Tata Teleservices. 

In a statement issued by Mistry’s office, the former Tata Sons chairman said both Tata and Soonawala had participated in the meeting with the legal counsel (who also happened to be a trustee of the Dorabji Tata Trust) and who represented the Tatas in the litigation. While Mistry did not name the legal counsel in his statement, noted lawyer Darius Khambata, who was also a trustee on the Dorabji Tata Trust was advising the Tatas on the Tata Teleservices versus DoCoMo battle. Khambata, in fact, resigned from the trust a day after Mistry was removed from the top job at Tata Sons. 

 

“At all times Tata and Soonawala concurred and approved the course of action adopted by Tatas and as advised by legal counsel,” said Mistry.

Mistry said insinuations that the DoCoMo issue was handled under Mistry in a manner inconsistent with Tata culture and values were “baseless”. “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,” Mistry said. These reports came after Mistry was unceremoniously removed by the Tata Sons board as its chairman on October 24.

Reacting to Mistry's statement, a Tata group spokesperson said: “Insinuations are being imagined. The matter is sub judice and we will not comment.”

“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,” the statement from Mistry’s office said.

Besides, the 2009 agreement with DoCoMo had been executed before Mistry became executive chairman of the Tata group and was signed by Ratan Tata when he was group chairman.

In an earlier letter to Tata Sons’ board of directors, Mistry had warned that to exit or shut down Tata Teleservices, the group would have to take a write-down of almost $4-5 billion, apart from paying $1.2 billion to DoCoMo as the Japanese company’s exit price. The Tatas have been sued by DoCoMo in London Commercial Court, a US court and in the Delhi High Court to enforce an arbitration award worth $1.2 billion that went in favour of DoCoMo.

According to a 2009 agreement, DoCoMo was to sell its 26.5 per cent stake back in Tata Tele to the Tatas at a minimum of 50 per cent of its exit price. But after DoCoMo expressed its plan to sell the shares, the Tatas cited a Reserve Bank of India (RBI) rule that bars buying back shares at a pre-determined rate. This triggered a legal battle between the Tatas and DoCoMo, which has gone in favour of DoCoMo so far.

In the statement on Tuesday, Mistry said the Tatas, under his leadership, requested DoCoMo to join them in seeking RBI’s approval. DoCoMo did not agree. Nevertheless, the Tatas applied to RBI for approval. Since RBI’s approval was not forthcoming, DoCoMo initiated arbitration that went against the Tatas. The Tatas under Mistry 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. The central bank, again, refused permission.

DoCoMo sought enforcement of the award in the Delhi High Court. In order to show their bona fides, the Tatas deposited a sum in excess of Rs 8,000 crore in the Delhi High Court.

“All decisions were taken with the unanimous approval of the Tata Sons board. In fact, all decisions were collective decisions and the actions were consistent with every such collective decision,” Mistry said.