Twitter
Advertisement

ED to investigate Cyrus Mistry's AirAsia fraud allegations

The revelations were made in a five-page letter written by Mistry to the Tata Sons' board and Tata Trust trustees after his ouster.

Latest News
article-main
Cyrus Mistry
FacebookTwitterWhatsappLinkedin

Amidst the blamegame between Tata Sons and its ousted chairman Cyrus Mistry, the Enforcement Directorate (ED) has decided to probe the fraud allegation made by the ex-chairman, according to a report in India Today
 
In a five-page long letter sent to the company board members and Tata Trust trustees, on Tuesday, Mistry had claimed that a "recent forensic investigation revealed fraudulent transactions of Rs 22 crore involving non-existent parties in India and Singapore." He was talking about fraudulent transactions in one of Tata Group's two aviation ventures, AirAsia.

He had also stated,"Executive trustee, Venkatraman, who is on the board of Air Asia and also a shareholder in the company, considered these transactions as non-material and did not encourage further study. It was only at the insistence of independent directors, one of whom immediately submitted his resignation, that the board decided belatedly to file a first information report (FIR)".

As a fallout of the letter, the ED has decided to investigate this allegation under Section 2 of the Foreign Exchange Management Act (FEMA), 1999. If an FIR was filed, as claimed by Mistry, then "the case would get investigated under the prevention of money laundering act (PMLA), with serious action plans," an ED official was quoted in the aforementioned report. 

In his letter, Mistry levelled allegations of being reduced to a "lame duck" chairman by Ratan Tata and other executives, while bringing out the dirty linen of atleast five group companies in public. He spoke about misdealings at Tata Motors, Tata Steel, the Nano project, and more. 

As a consequence, the letter raised a red flag with the domestic bourses, which sought clarifications from the companies. Tata Group companies have started submitting their clarifications to the BSE and the National Stock Exchange (NSE). 

Mistry was ousted in the summary proceedings of a board meeting on Monday, which is now being called a coup. Ratan Tata is now the interim chairman and a selection committee has been set up to pick the next Tata Sons' chairman within four months. The heightened uncertainty and the turn of events after Monday's ouster, has led listed Tata Group companies' market value erode by nearly Rs 55,000 crore. 

Find your daily dose of news & explainers in your WhatsApp. Stay updated, Stay informed-  Follow DNA on WhatsApp.
Advertisement

Live tv

Advertisement
Advertisement