Ratan Tata saving British Steel at the cost of Tata Steel India: Nusli

In his first letter to Tata Steel shareholders defending his position as an independent director, Nusli Wadia attacked Ratan Tata for 'destroying' the tradition built by JRD Tata and working to save British Steel.

Wadia argued that Tata Steel was set up by Tata Group founder Jamshetji Tata to fight British Steel. "Ratan Tata is trying to save British Steel (Corus/Tata Steel Europe) by deploying huge resources at the cost of Tata Steel India." Wadia emphasised that he had differed strongly with Ratan Tata regarding the buyout of Corus, as his view was that Tata Steel was best served by expanding in India.

Wadia said he had also differed strongly in providing continuous financial resources to Corus since 2012. "From that date to now, the capital employed in the business has risen by about Rs 25,000 crore with nil return," he wrote. As a result, Tata Steel has lost its premier position in India.

Wadia believes that the situation in Corus is likely to further deteriorate and impair Tata Steel's Indian operations. "It is not the role of your company to save jobs in the UK nor to support its pension funds. The role of your board is to apply your funds to the most profitable growth opportunities...better served by investing in India where the returns are better."

Wadia believes that any return on investment to shareholders of Tata Steel from its investment in Corus looks "a near impossibility". "The shareholders of Tata Steel have already suffered a serious impairment of about Rs 35,000 crore and are likely to have further write-downs in the future," he said.

The letter from Wadia, who has been on the board of Tata Steel for 37 years, was in response to Tata Sons, under interim chairman Ratan Tata, sending a notice to the steel maker's shareholders to remove Wadia from the board. The shareholders' meet is scheduled for December 21.

Wadia pointed out that the name Tata in 'Tata Steel' was given to it by its founders and not Tata Sons. This name was attached much before Tata Sons was incorporated. "The products of the company have been sold since 1907 under the brand name 'Tata' almost 91 years before any licence agreement with Tata Sons was entered into by the company that too without a payment of any fee. It is only from 1998 that Tata Steel entered into a licensing agreement with Tata Sons, the validity of which needs to be examined and suitably addressed," he said.

Wadia said that no financial support was given by Tata Sons to Tata Steel, including for the acquisition and continuation of the investment in Corus or otherwise.

Wadia also questioned the locus standi of Kumar Bhattacharyya, a friend of Ratan Tata, who has been giving statements relating to Tata Steel's UK operations in the past and even now although he is neither a director on the board nor an employee of Tata Steel or its subsidiaries. Wadia questioned if such interventions by Bhattacharyya, who is part of the panel to search the next Tata Sons chairman, was in contravention of law.

Shoot

Trending News

Byju’s acquires US-based Osmo for $120 million

Personal care brand Arata Zero Chemicals raises Rs 3.5 crore in seed capital

Etail may lose Rs 40,000 crore, retail to get a 3rd of it

Amazon food biz to log off if new rules remain on menu

Changes to FDI policy unclear, don’t help the cause of startups: Lenskart's Peyush Bansal

Slowdown or not, we are aggressive on US: TCS CEO Rajesh Gopinathan

SpaceX to layoff 10% of workforce

Amazon Pay gets another Rs 300 crore from parent entity

Steadview Capital invests $74M in Ola valuing it at around $6B

Byju’s ups revenue to Rs 490 cr in FY 18, losses drop by half

A Rs 120-cr WhatsApp message to fight fake news

OYO bulks up international leadership with key hires

For Matrix Partners, transaction-based startups mean business

Amazon joins global companies such as Google, WhatsApp and Truecaller that have put their bets on the UPI business in partnership with banks.

Uber looks to double its engineering headcount in India

SoftBank to invest additional $2B in WeWork: Sources

Snapdeal claims to have added 50,000 sellers in last 12 months

Agritech startups Sabziwala and LivLush merge their business under new entity Kamatan

Avail Finance lands $17.2M from Matrix Partners & Ola, Freecharge and Flipkart founders

RBI suggests tax sops, self-regulation to build fintech space

Swiggy hires new CEO for its Access Service, gets new CFO

Logistics company Delhivery registers 44% increase in FY17 revenues

WeWork to acquire one of the oldest social networks, Meetup

Qualcomm rejects Broadcom's $103 billion offer

EasyRewardz gets $2 million Series-A funding

'Anemic' iPhone 8 demand drags Apple shares lower

Lending platform Lenden Club gets Rs 3.5cr in Equity Investment

On festive sales, Flipkart says 65% clients from Tier-II cities