Mistry pinpoints “legacy hotspots” – certain companies that if realistically assessed could result in a write-down of nearly $18 billion.
New Delhi: In a letter to the Tata Sons board and the Tata Trust trustees, former Tata Group chairman Cyrus Mistry pointed out that he had been placed in the position of a “lame-duck chairman” and that when he first assumed charge in 2012 he “inherited a debt-laden enterprise saddled with losses”.
The letter, a copy of which can be found here, singles out Tata Motors’ domestic and passenger-vehicle operators, Tata Steel’s failed European operations, Indian Hotels Co, Tata Power and Tata Docomo as “legacy hotspots”.
Most importantly, these hotspots still face challenges and if one were to realistically assess their fair value, it could result in a write down of nearly $18 billion.
“I am not sure if individual board members and the trustees truly appreciated the extent of the problems I inherited. I cannot blame them, for I myself, as an non-executive director, did not have a clear grasp of the issues involved,” Mistry writes.
He then goes on to list the specific problems of each legacy hotspot, as well as businesses that he was somewhat ushered into by Ratan Tata, such as Air Asia India and the joint venture with Singapore Airlines.