Refuting Tata Sons’ claim that expenses rose during his stint at the helm of affairs at the group, ousted chairman Cyrus Mistry on Tuesday said the replacement of controversial lobbyist Nira Radia’s Vaishnavi Communications with Arun Nanda’s Rediffussion Edelman just before he took over resulted in a jump in cost from Rs 40 crore to Rs 60 crore a year.
“She (Radia) had been replaced by Arun Nanda (Rediffusion Edelman), who had been brought in by Ratan Tata at a cost of Rs 60 crore per year for PR support just prior to Mistry taking charge,” Mistry’s office said in a statement.
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The statement from Mistry’s office added that part of the public relations infrastructure paid for by Tata Sons was also provided to Ratan Tata-headed Tata Trusts.
Earlier, in a nine-page statement issued last week, Tata Sons had claimed that staff costs had risen to Rs 180 crore in 2015-16, against just Rs 84 crore in 2012-13. The other expenses had increased from Rs 220 crore in 2012-13 to Rs 290 crore last financial year.
The Mistry statement also said that there had been "fundamental changes" in compensation to the leadership in the past five years of Ratan Tata’s chairmanship.
In Tuesday’s statement, Mistry’s office went on to single out the Tata group’s investment in Piaggio Aero, promoted by one of Ratan Tata’s friends, as a “distressing” case, as Tata Sons had to exit at a commercial loss of Rs 1,150 crore.
“This was after the efforts of Bharat Vasani and Farokh Subedar, who managed to recover Rs 1,500 crore, overcoming the objections of Mr Ratan Tata, who in contrast favoured increasing investments in that company. Today, the company is, for all practical purposes, nearly bankrupt,” the statement said.
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