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Tata-Mistry saga: India's market regulator Sebi seeks clarification from Tata group companies

The stock exchanges are also monitoring the price movement and trading activities of over two dozen listed companies of Tata group. Photograph: (AFP)

WION New Delhi, Delhi, India Oct 27, 2016, 12.22 AM (IST)

India's market regulator, the Securities and Exchange Board of India (Sebi), is keeping a close watch on the high profile Tata-Mistry case. The board sought clarification from many of the companies listed with India's largest conglomerate, Tata Sons, on Wednesday. 

Sebi immediately took action to inquire about the serious allegations of breach of corporate governance norms and listing regulations, levelled by the sacked chairman Cyrus Mistry.  

"We (Sebi) are taking note of each and every development and will act immediately on any hint of possible violation of corporate governance and listing norms or any other regulation under our jurisdiction," a senior official said.

In an explosive confidential email to the board members of Tata Sons, Mistry pointed out that the conglomerate faces a possible writedown to the tune of $18 billion. 

He also wrote, that "ethical concerns" had been raised over certain transactions and a "recent forensic investigation revealed fraudulent transactions of Rs 22 crore involving non-existent parties in India and Singapore".

The stock exchanges are also monitoring the price movement and trading activities of over two dozen listed companies of Tata group, which have seen an erosion in value in the last two trading sessions after Mistry's surprise removal. 

The exchanges have asked these companies, including Tata Motors, Tata Steel, Indian Hotels, Tata Teleservices and Tata Power, to provide full details about these issues.

The companies were questioned "whether such event/negotiations/article stated in published news were taking place? If so, you are advised to provide the said information along with the sequence of events in chronological order and the material impact of this article on the company," the exchanges said. They are yet to respond to the board and stock exchanges. 

In his letter, Mistry claimed that despite being the chairman, he had been pushed to a position of a "lame duck" with the modified rules of engagement between the Tata family Trusts and the board of Tata Sons. 

(WION with inputs from PTI)
 

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