November 24, 2016 1:37:46 am
A day after Cyrus Mistry — who was ousted as Tata Sons’ chairman last month — levelled charges against Ratan Tata about a proposal “to sell TCS to IBM” and that the Tatas paid nearly double the price to acquire Corus for over $12 billion, the Tatas roped in former top executives of both firms to rebut the charges.
FC Kohli, former CEO and deputy chairman of TCS, said Mistry’s comments regarding the sale of TCS to IBM at some “unspecified point in time” are not correct. “I was actively involved in the decision to bring IBM to India. A JV for hardware manufacturing and support in India, Tata IBM, was set up in 1991-92. This JV was undertaken to promote a computer hardware industry in India which was non-existent at that time. I would like to reiterate that at no point at that time was there ever an intention of the Tata Group to sell TCS to IBM,” Kohli said.
“With reference to the timeline of the entire episode I would also like to point out that my “heart by-pass surgery” took place in 1984. JRD Tata was interested in my health and progress after the surgery and he established contact with my surgeon at Houston,” Kohli said. “He also wanted to know when I would be well enough to return to India. He wanted to discuss Burroughs proposal for software work in India under Tata Burroughs, which might affect TCS’ business,” Kohli said.
In a statement issued late in the evening, Mistry’s office said he “agrees with him (Kohli) that there was no intention of the Tata Group selling TCS to IBM or to any other company. The statement Mistry made was based on information from sources who were close to JRD Tata who informed him that it was Ratan Tata’s intention, and not the group’s intention, to sell TCS.” On Corus, it said Mistry did not say that the ultimate decision was not unanimous, but there were differences and reservations significantly, the fact that Corus was available for purchase at half the price in the recent past is undisputed.
On the Corus acquisition, B Muthuraman, former vice chairman & managing director, Tata Steel, said, “I am surprised and very sad to see the speculative and biased views being fed in the media regarding the acquisition of Corus nearly a decade ago in early 2007. Such frivolous and unconsidered comments on the acquisition should be avoided.”
In another statement, Tata Steel said the acquisition of Corus Group Plc was based on the long term strategy of the company to pursue growth through international expansion and enhance the portfolio of value added products. “The performance of Corus Plc post acquisition validated the strategy till the black swan event of the global financial crisis structurally impacted the underlying demand conditions in Europe causing financial hardship to the entire industry. The entire acquisition was undertaken by following due board governance process under the supervision and oversight of the board of the company. The acquisition proposal was extensively deliberated in the board and the board approved the transaction,” it said.
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