MUMBAI: Flagging “ethical concerns” in Tata group’s aviation joint venture with Air Asia, ousted Chairman Cyrus Mistry has alleged that forensic investigation revealed fraudulent transactions of Rs 22 crore involving non-existent entities in India and Singapore.
As the bitter war played out between him and interim Chairman Ratan Tata, Mistry also alleged that due to the latter’s passion for aviation, Tata Sons board increased capital infusion in the aviation sector at multiple levels of the initial commitment, reports PTI.
In a letter written to the Board members of Tata Sons a day after he was ousted, Mistry said: “Board members and trustees are also aware that in the case of Air Asia, ethical concerns have been raised with respect to certain transactions as well as overall prevailing culture within the organisation.
“A recent forensic investigation revealed fraudulent transactions of Rs 22 crore involving non-existent parties in India and Singapore.”
Mistry went on to allege that “executive trustee Mr Venkataraman, who is on the board of Air Asia and also a shareholder in the company, considered these transactions as non-material and did not encourage further study”. It was only at the insistence of the independent directors, one of whom immediately submitted his resignation, that the board decided to belatedly file a first information reports, Mistry said in the letter.
He claimed it was Tata who completed negotiations with Air Asia but early in his tenure as the Chairman of Tata Sons he was asked to table a proposal for the JV with Air Asia at a Tata Sons board meeting.
Claiming that in the case of JV with Air Asia, he was able to extract a “promise of no debt to be raised at the level of JV, as well as limiting Tata Sons investment to 30% of the US $30 million equity”, Mistry said he was taken by surprise with a similar situation when Tatas formed a JV with Singapore Airlines.