BUSINESS

Tata Capital Denies Mistry's Claim, Says Loan To Siva Followed Due Process

Mistry had alleged the loan was given on the "strong advice" of an executive trustee.

28/10/2016 10:19 PM IST | Updated 28/10/2016 10:24 PM IST
NEW! HIGHLIGHT AND SHARE
Highlight text to share via Facebook and Twitter
AFP/Getty Images

Tata Capital on Friday said the Rs 200-crore loan to two firms of Siva group was sanctioned by a panel of its Board and due processes were followed, rebutting ousted Tata Sons Chairman Cyrus Mistry's allegation that it was given on the "strong advice" of an executive trustee.

Tata Capital further said the facility was settled in June 2014 and due disclosures were made in the audited financial statements of the company.

"Tata Capital Financial Services Ltd (TCFSL) had extended Secured Term Loans to Siva Industries and Holdings Limited (SIHL) and Siva Ventures Limited (SVL) aggregating Rs 200 crore. The facility was sanctioned by the Investment Credit Committee of the Board," the company said in a statement.

It further said: "Due internal processes as applicable for sanctions of loans of such nature and value were followed.

The facility had a security cover significantly in excess of the loans granted and was backed by a personal guarantee of C Sivasankaran."

Mistry, in his letter to the board of Tata Sons a day after he was sacked as the Chairman had written that "Tata Capital had a book that required significant clean up on account of bad loans to the infrastructure sector".

He had alleged that "the loan to Siva was under the strong advice of Executive Trustee Venkatraman which had since turned into a non-performing asset. All of this resulted in Tata Capital to recognise an abnormal rise of NPAs."

Sacked unceremoniously on Monday, a "shocked" Mistry had levelled a series of allegations against Ratan Tata and contended that he was pushed in to a position of "lame duck" chairman and changes in decision making process created alternate power centres in Tata Group.

More On This Topic