Cyrus Mistry, who was removed as chairman of Tata Sons earlier this week, on Friday said the Tata Sons board including the nominee directors of the Tata Trusts were adequately informed about the decision of Tata Power to buy Welspun Renewables Energy for Rs 10,000 crore. In a statement issued late on Friday evening, Cyrus Mistry’s office said: “It is surprising that Mr Tata has sought to justify Monday’s conduct by making vague public statements that are contrary to his knowledge and contrary to the records of the Tata Group.”
“Tata sources said that the trustees of Tata Trusts were not kept informed about the transaction. The facts are as follows: In the early part of this year, Tata Power made a presentation to Tata Sons that a significant focus area would be the renewables sector,” he said.
“The Tata Sons Board appreciated it. On May 31, 2016, a note was circulated to the board of Tata Sons and to Ratan Tata (he was sent all board notes as chairman emeritus) providing information about the proposed Welspun transaction, and asking them if they needed any further information,” he said.
The only board member to reply was Vijay Singh, a nominee director of Tata Trusts on the Tata Sons board, and he expressed positive appreciation. “With no other view having been expressed, Tata Power executed the agreement on June 12, 2016,” Mistry said.
Thereafter, a series of discussions took place in the presence of Ratan Tata, in his capacity as chairman emeritus and trustee NA Soonawala, trustee of some Tata Trusts. “These included much more detailed interaction with the merchant bankers to the transaction. Soonawala had strong views on how this listed operating company must structure its transaction and proceeded to have further meetings with the merchant banker,” the statement said.
Since funding for the transaction required shareholder approval, the transaction was discussed again at the Tata Sons board. “On June 30, 2016, Anil Sardana, CEO of Tata Power made a detailed presentation to the Tata Sons board. The discussion covered all aspects of the transaction including the structure and the Tata Sons board unanimously approved the transaction,” it said.
The minutes record that Nitin Nohria and Vijay Singh “after discussing the proposal with Tata and Soonawala”, while reiterating their view that the proposal should have come to the trustees earlier, approved the transaction, the statement said.