India's Ministry of Civil Aviation has said it will investigate allegations of unethical behaviour at Tata Group raised by now former chairman Cyrus Mistry.
Mistry alluded to several irregular dealings by certain trustees in an email sent to the board of Tata Sons (the Group's holding company) this week following his removal from the chairmanship earlier this week.
In the email, which was leaked in its entirety to the Indian press, Mistry claimed Tata Group's board and trustees had been made aware of ethical concerns regarding certain transactions as well as the overall prevailing culture within AirAsia India.
"A recent forensic investigation revealed fraudulent transactions of INR220 million (USD3.3 million) involving non-existent parties in India and Singapore," the email said. "Executive Trustee, Mr. Venkatraman, who is on the board of Air Asia [India] and also a shareholder in the company, considered these transactions as non-material and did not encourage further study."
Mistry claims that 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 report with Indian law enforcement concerning the matter.
India's Minister of Civil Aviation Ashok Gajapathi Raju told a press conference Thursday that as with any issues raised by the public, the case would be investigated with the relevant laws applied.
For its part, Tata Sons has rejected Mistry's allegations labeling them "unsubstantiated" and "malicious". It questions why it is only now that Mistry has shed light on some of the actions taken during his four-year tenure and which happened with his full knowledge.
"It is unfortunate that it is only on his removal that allegations and misrepresentation of facts are being made about business decisions that the former Chairman was party to for over a decade in different capacities. The record, as and when made public, will prove things to the contrary," it said.
