N Chandrasekaran, chairman of one of the leading corporate houses of the country – Tata Group – has held informal talks with the government, expressing an interest in buying India’s national carrier – Air India – in partnership with Singapore airlines, according to Financial Express.
Times of India reported that the Tata Group is interested in buying a controlling stake in Air India with 51% equity. Recently, finance minister Arun Jaitley and civil aviation minister Ashok Gajapati have both spoken openly about this. Though the government is keen on retaining Air India as a domestic air lines, it is happy about the proposal.
The heavily debt-laden carrier has had no profit for the past ten years. The main reason behind Air India’s loss is the intense competition from the more efficient and cheaper private airlines. Presently Air India is reeling under a debt of rupees fifty thousand crore, of which rupees twenty-eight thousand crore is in capital debt and rupees four thousand crore in interest burden. While the Tata Group is concerned about the huge debt, they are also considering the 14% market share commanded by the airlines. Apart from that, government has also assured Tata Group that it will bring down the debt substantially to make the air line a lucrative one.
Tata chairman Ratan Tata had said in 2013 that the group would “be happy to look” after Air India as and when privatisation happens. So, this can be a home coming for Air India, as it was launched and owned by the group since 1932 before being nationalised in 1953.
The Air Asia India’s Chief Financial Officer (CFO), Ankur Khanna was questioned this week by the Enforcement Directorate (ED) under the provisions of the Foreign Exchange Management Act (FEMA). The ousted Tata Group Chairman Cyrus Mistry has alleged that fraudulent transactions of Rs 22 crore with non-existent entities in India and Singapore were carried out by the airlines.
The Enforcement Directorate (ED) probe is also looking at a specific transaction of Rs 12 crore, out of Rs 22 crore transactions made to a firm in Singapore. The claim of forensic investigation into this transaction was made by Mistry in October, indicating the ethical concerns in the joint venture of Tata Group and Air Asia.
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 FIR, Mistry had said in the letter. In the ongoing bitter war between Mistry and Ratan Tata, Mistry told Indian Express that the Tata Sons Board had increased the capital in the initial levels of commitment into the aviation sector due to Mr. Tata’s passion for aviation.
In 2013, AirAsia India was started as a low-cost carrier when Tata Sons had joined hands with Malaysian carrier AirAsia and Arun Bhatia’s Telestra Tradeplace.
90% of the shareholders of Tata Steel Limited unanimously voted to remove Nusli Wadia as the independent director from the board of companies with immediate effect. An ordinary resolution was passed at the Extra Ordinary General meeting (EGM) on Wednesday and was thrown open to public for voting.
Early on Thursday, the company declared the results and sent out a statement to the Stock Exchanges, publicizing details of the six-hour long EGM held on Wednesday. The statement revealed that 56.79 crore votes were in favour of Wadia and 5.7 crore against the motion. On reckoning it appears that 90.80 per cent shareholders supported the resolution.
Wadia who had addressed the group’s company shareholders had revealed to them his concerns about the lack of corporate governance and violation of insider trading norms by Tata Sons Ltd and trustees of Tata Trusts. As per reports Wadia stayed away from the EGM yesterday on the grounds of it being state-managed. Further, he also filed a Rs.3000-crore defamation suit against Ratan Tata, Tata Sons and a few other directors from the company.
All this comes amid Ratan Tata’s impending legal battle with Cyrus Mistry, who was removed as the chairman of Tata Sons in October.
In the controversial battle between Tata’s and Cyrus Mistry, finally, Mistry has resigned from all the Tata Group Companies at the start of the week. He took the decision when four of the firms were to vote against him, and to remove him as the director in extraordinary general meetings or EGM’s. In his letter to the Board of Tata Sons and shareholders today, he had written, “It is time to shift gears, up the momentum and be more incisive in securing the best interests of the Tata group”.
According to the Times of India, he has stated in his letters “better served by moving away from the forum for extraordinary general meetings”, he said: “It is with this thought in mind that I have decided to shift this campaign to a larger platform, one where the rule of law and equity is upheld.”
Further, he added that he never thought that he would go to an “external forum” to solve the trivial issues, which should not have arisen in the first place.
After the sudden sacking of Mr. Mistry as the chairman of Tata industries in October followed a series of board meetings, specifically called to remove Mistry. The appointed interim chairman, Ratan Tata, appealed to the shareholders to assist him in removing Mistry from various boards. Mr. Tata said to NDTV that “Deliberated action” was taken to oust Mistry. In Ratan Tata’s letter, he has mentioned that Mistry’s continued presence can make company “dysfunctional”
The bitter boardroom fight within the $100 billion agglomerate went on becoming worse, months after months.
On Monday, a shareholder’s poll at the extraordinary general meeting of the TATA Industries ensued in the removal of Cyrus Mistry as the director of the renowned conglomerate. This development also implies that his position as the Chairman of Tata industries stands revoked.
While the Tata’s have not yet cited any reasons for his removal, it is believed that several managerial issues between Ratan Tata and Cyrus Mistry over the years, has led to this decision.
On October 24, Mistry was abruptly sacked as the Chairman of Tata Sons, the holding company of all Tata enterprises.
This, in turn, brought back Ratan Tata as the interim Chairman of the company. However, Mistry continues to hold positions on the board of various Tata companies.
EGMs with various listed companies on the board of the Tata Sons are lined up throughout this month, to seek their approval on the removal of Cyrus Mistry as their director. The decision is most likely to favor the Tata Sons.
Currently, the Tata group is valued at over USD 100 billion, which includes Tata Steel, Tata Motors, Tata Salt and many other companies under their wing. Apparently, Mistry was the only the second outsider after Nowroji Saklatvala in 1932 to spearhead one of the country’s largest business empires.
Ratan Tata on Sunday accused airlines for retaining controversial 5/20 rule that restricts new airlines to fly overseas. Ratan Tata accused these airlines for lobbying and using their ‘Monopolistic pressures’.
Ratan Tata is associated with Vistara and AirAsia. Replying to the statements made by Ratan Tata, SpiceJet Chief Ajay Singh advised Vistara and AirAsia to serve nation first and then think of flying overseas. “No country in the world, including Singapore and Malaysia, allows its airlines to be controlled by foreign airlines. If Indian Airlines like SpiceJet and IndiGo are not allowed in these countries, why should they be allowed to control airlines in India?” he added.
Mr. Singh also said that both the airlines are controlled by their foreign parents and they had undertaken, while licensing to follow 5/20 rule. Tata runs these two airline in a joint venture. To fly abroad, airlines should have five years of operational experience and 20 planes in its account. Government of India is in advanced stage of modifying civil aviation policies.
One of the proposals is to scrap 5/20 rule to which Tata applauded on Sunday while several older airlines such as Jet Airways, IndiGo, SpiceJet and GoAir are strictly opposing any move to scrap 5/20 norm.
Car Buyers can breathe a sigh relief, thanks to the Finance Ministry’s decision to stay put the cut in excise duty till December 31,2014, which was scheduled to end on 30th June as decided by the previous UPA government.
The auto stocks showed a little uplift with Maruti Suzuki trading up by 3 percent. The decision is mainly aimed at cutting back revenue, thereby benefiting economy in the long run, Finance Minister Arun Jaitley said.
The excise duty for SUVs dropped to 24 percent from the earlier 30 percent while on larger cars it came down from 27 percent to 24 percent. The small cars and scooters witnessed a 8 percent cut down from an earlier 12 percent. This announcement is expected to boost the crumbling auto industry, which continued to face a steady decline for the second consecutive fiscal of 2013-2014.
Industry experts welcomed the move and deemed it necessary to revive economic growth and stability during this phase when the country is facing a major economic slump in 25 years. “The nation voted 4 change. We need 2 stand together 2 support the new Govt’s actions to re-build economic growth and prosperity in India (sic),” tweeted Mr. Ratan Tata, Chairman emeritus to Tata Group.