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Sivasankaran hits back; says loan taken against TTSL shares

After being named in Cyrus Mistry’s scathing letter to Tata Group’s board, C Sivasankaran has responded saying he was given a loan by Tata Capital of Rs 200 crore against Rs 700 crore worth of Tata Teleservices shares. He is the founder of Siva Group.

“Mistry dragged me into the controversy, but did not mention that I had pledged my shares for the loan,” says an agitated Sivasankaran. Mistry’s letter says that Tata Capital extended the loan to Siva on recommendation by executives. The letter mentions NPA concerns on Siva units’ loans.

He had invested in Tata Teleservices and owned 9.5 percent stake in the company at the time he took the loan.

Tata’s press release says the company followed due processes while giving the loan to Siva. Sivasankaran is not privy to these processes but he believes this statement is the truth.

Sivasankaran was not able to repay the loan after he filed for bankruptcy. The shares remained with the Tata Group.

He says, “He chose himself to go for the vote and in the vote he lost and he resigned as the chairman. He is still a director of many group companies in Tata’s then why this hue and cry? To my opinion it is an overreaction by press and by Mistry.”

He adds that Cyrus Mistry is an angry man and appointing him as Chairman was a wrong decision.

Below is the verbatim transcript of C Sivasankaran’s interview to Jude Sannith on CNBC-TV18.

Q: In terms of the investment that you made in the Tata Teleservices (TTSL) could you just first talk just elaborate on the nature of that investment and all that it employed in terms of the investment that you made?

A: We invested in TTSL, we got the shares. We were never directors in their company and then NTT DOCOMO joined and the company right now is about Rs 38,000 crore debt and a lot of losses. If you are concerned, if you really want to discuss about the Rs 200 crore what Cyrus Mistry wrote in the mail is 100 percent right. We took Rs 200 crore loan. There is and I called that is not transparent is, but he should have also mentioned it was against Rs 700 crore worth of TTSL shares.

Q: You have mentioned in several interviews given to a few newspapers that Cyrus Mistry is not a transparent man. If you could just please elaborate what you mean by that?

A: I never said, in this case he was not transparent. When he chose to bring my name into the controversy in that letter, he should have written the full fact saying that Rs 200 crore loan was given in 2012 against the Rs 700 crore worth of TTSL shares and it was foreclosed on the 2014. Then there is nothing to talk about it.

Q: What is the move going forward then Cyrus Mistry has also said that the loan that was given to your company to Siva Group is a wrongful loan and that should not have been given in the first place. What is your response to that?

A: Yesterday there was a press release from Tata Capital which you would have also read that they followed all the process and given the loan. I not privy to any of their policies or the procedures, so I believe the statement made by Tata Capital is truth and accurate.

Q: Moving forward Cyrus Mistry has laid implications on certain R Venkataramanan who is an executive trustee of the board in playing a role in your getting this loan, what is your association with R Venkataramanan?

A: I don’t think that R Venkataramanan has played any role in this and I am not aware of that. It is a simple loan with an interest component and against TTSL shares. So, I don’t think that I needed to any other role or support.

Q: What you are essentially saying is you don’t know R Venkataramanan, do you know him?

A: I know R Venkataramanan, what I am saying is I don’t needed any recommendation from anyone to Tata Capital is a pure business decision. They have given a loan based on the shares.

Q: Why do you think Cyrus Mistry has implicated R Venkatraman’s name?

A: I don’t even understand why he has brought my name and why he chose to not to mention about the security. So, I don’t know what is the thing.

Right now Cyrus Mistry is a very angry man but the problem is what Mistry is not destroying is Tata Group’s valuation, I read in the paper Rs 35000 crore valuation gone in 3 days. The bigger picture here is that they are destroying India’s equity.

Mistry has been removed as the chairman by board of directors. There are eminent board of directors there, good industrialists are there, when all these people have requested him to get down, you should have got down.

He chose himself to go for the vote and in the vote he lost and he resigned as the chairman. He is still a director of many group companies in Tata’s then why this hue and cry?

To my opinion it is an overreaction by press and by Mistry. One person resigned as the chairman, he can again become a chairman also after couple of years, who knows?

However if this is the problem that he can create why people are not questioning appointing him as the chairman itself to start with? He was in the selection committee and the people selected a person from the selection committee as the director. He has a conflict of interest. His own companies are contracted to Tata Group. How can you select a person who is already a supplier and who will continue to be a supplier?

One of the reasons I never accepted any position in Tata Group as a director or as an employee is I have conflict of interest. I am a businessman, I am doing business. So, this raises lot of questions but these questions has to be addressed in a calm manner not when a person becomes so angry.

The bigger picture today is they are destroying India’s equity.