Tata Power To Investigate Contracts Awarded To Mehli Mistry’s Companies
The Tata Power - Mehli Mistry connection to be scrutinised by the company’s audit committee.
The four member audit committee of Tata Power has appointed an international forensic audit company to investigate contracts signed by the company with entities owned by Mehli Mistry.
Mehli Mistry is the other Mistry embroiled in the Ratan Tata - Cyrus Mistry battle. Mehli Mistry and Ratan Tata are old friends said a person close to the developments. Mehli is also related to Cyrus Mistry but the two are not close, he added.
Mehli Mistry and his family own the M Pallonji Group of Companies, a group of six private companies as per the information on the group’s website. These are
M Pallonji & Co Pvt. Ltd.
Pallonji Coatings Pvt. Ltd.
Pallonji Leasing Pvt. Ltd.
Pallonji Investments & Finance Pvt. Ltd.
M Pallonji Shipping Pvt. Ltd.
The group lists several clients on its website, including ACC, Mahindra & Mahindra, ONGC, Reliance Industries as well two Tata companies - Tata Power and Tata Motors. Sterling Motors is an authorised dealer for Tata Motors.
The person quoted above said the M Pallonji Group first bagged a contract from Tata Power in the early 90s and since then has received Rs 3,000 crore in dredging, barging and painting contracts from the Tata Group company.
He added that in 2013, after Cyrus Mistry was appointed Tata Sons Chairman and Tata Power Chairman, the company renegotiated some contracts on fresh terms.
Pursuant to media reports on allegations of impropriety in the grant of Tata Power contracts to Mehli Mistry’s group, the audit committee of Tata Power, consisting of Homiar Vachha, Deepak Satwalekar, Vibha Padalkar and Nawshir Mirza, decided about two weeks ago to investigate the allegations and re-look at the contracts signed with M Pallonji Group companies. All four directors serve as independent directors and the audit committee is chaired by Vachha.
An international forensic audit and investigation firm has been appointed and the audit proposal will be approved at the next committee and board meeting.
In an email response Tata Power said it would not like to comment on the story, and Tata Sons has yet to respond to BloombergQuint’s queries on the audit committee’s decision and the process hereon.