In response to the nine-page statement by Tata Sons, Mistry had issued a second rebuttal to the accusations levelled against him. The statement specifically responded to the allegations of rising expenses and impairment losses
On the allegations regarding rising expenses under Mistry’s four-year rule, the statement called it a “brazen attempt to mislead” the public and shareholders. Among its rebuttals, the statement said that the replacement of controversial lobbyist Niira Radia’s Vaishnavi Communications with Arun Nanda’s Rediffussion Edelman just prior to Mistry taking over also resulted in a jump in costs, from Rs 40 crore a year to Rs 60 crore a year.
The statement added that part of the PR infrastructure paid for by Tata Sons was also provided to Ratan Tata-headed Tata Trusts.
On Mistry's allegation that Rediffusion's PR services were extended to Tata Trusts and paid for by Tata Sons, Nanda's letter said that it was Mistry's specific instructions, to Nanda and Tata's brand custodian Mukund Rajan, according to which the work done by Rediffusion for Tata Trusts was to be absorbed within the Tata Sons' mandate and paid for by Tata Sons.
Nanda's letter stated that Rediffusion had been hired to take over Tata Group's public affairs mandate from November 1, 2011, after the group's contract with Vaishnavi Communications expired on October 31, 2011. Further, the letter said the group's five-year contract with Rediffusion had a three-year no-exit clause applicable to both sides and was set to end on October 31, 2016. The scope of the work under the contract, the letter explained, covered the PR mandate for 33 companies
of the Tata Group, including Tata Sons. To fulfil its PR mandate for the group, Rediffusion tied up with the world's largest PR firm, Edelman.
Further, the letter asked Mistry that if he had objections over the contract with the former's firm, then why had Mistry agreed to extend the contract between Tata Sons and Rediffusion beyond the original five-year period in May this year. The letter said that Mistry's decision to extend the contract was communicated to both Nanda and Rajan.
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The letter also asked Mistry why he had not exited the contract after the expiry of the three-year no exit clause on November 2014. The letter added that Mistry had over two years to make such a call. ( View the entire letter below)
Full text of Rediffusion's letter to Mistry (Photo: Times of India e-paper)