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Cyrus Mistry emerging as the country’s first activist investor in tussle with the Tatas

To understand the strange nature of the tussle between Cyrus Mistry and Ratan Tata to run the Tata group of companies, one must first understand the somewhat paradoxical nature of the way the group run from Bombay House is structured.

The holding company, Tata Sons Ltd, which ousted Mistry as chairman under Ratan Tata‘s controlling gaze, is a closely-held company that in turn is controlled by a clutch of trusts that in effect stand for the interests of a community and its values. At the other end, this closed group manages and often controls several publicly-held companies with millions of small investors who are either direct shareholders or hold stakes through mutual funds.

“The interface between the Trusts, Tata Sons and operating companies — these are elements that need to be discussed,” Mistry has said, defining a conundrum that needs to be resolved.

Cyrus Mistry. ReutersCyrus Mistry. Reuters

Cyrus Mistry. Reuters

Mistry’s decision this week to quit the boards of Tata companies and fight a legal battle instead of shareholder meetings is on the one hand acknowledging that the number game, whether in Tata Sons Ltd or in several public companies it controls, is not on his side. On the other hand, it announces his likely arrival as India’s first big-scale activist investor — which in a way marks the maturing of shareholder democracy in India.

The irony could lie in the fact that Mistry prefers courtroom battles to addressing shareholders, but this is because both independent directors as well as government-controlled financial institutions such as the Life Insurance Corporation would by and large prefer to avoid taking sides with Mistry, whose actions on investment decisions made by predecessor Ratan Tata fall in the grey area where open-and-shut answers are not easy.

Mistry now has to defend himself at two levels — which explains why he prefers legal battles. He has to talk over the heads of silent or reticent institutional voters to gain public credibility, and also has to redeem himself from implicit charges that he acted against Tata “values” which have a measure of concern for him as a member of the Parsi community.

In the 1990s, Ratan Tata ousted old-world satraps such as Russi Mody, Ajit Kerkar and Darbari Seth in largely silent coups. It was Rajan Nair, a trade union leader representing workers of the Tata Engineering and Locomotive Company (Telco — which became Tata Motors in 2003), who once spoke aloud in a shareholders meeting. Mistry is now donning battle fatigues — right at the top.

When Dhirubhai Ambani addressed literally crowds of Reliance investors with his hands on his hips at the then Bombay’s Brabourne Stadium, he ushered in the razzmatazz of shareholder democracy but with no significant dissent.

We saw skirmishes in the 1980s and 1990s when takeover tycoons such as Manu Chhabria, Rama Prasad Goenka and Swaraj Paul fought shareholder battles with mixed results. UK-based Paul’s bid to take over Escorts and DCM failed despite financial institutions (FIs) backing him as courts supported H.P. Nanda. Maybe Mistry has similar hopes from the courts, this time as an aggressor than as a defender.

The role of FIs has been controversial because there is an inevitable political angle to it. With Ratan Tata’s pet Nano project located in Prime Minister Narendra Modi‘s Gujarat state, and Tata having met finance minister Arun Jaitley last month, Mistry is decidedly on a weak wicket if private lobbying is of essence. Activism in public fora such as media and the courts are a natural, logical next step.

The US has activist hedge funds and investors such as Kirk Kerkorian, Carl Icahn and Bill Ackman, who regularly stand up to ask tough questions to big business boards, and often swing boardroom decisions. India’s FIs and mutual funds have been largely passive at best and politicised at worst, despite having the mandate to represent small shareholders.

India has seen minority shareholders fighting small battles in companies such as Maruti Suzuki Ltd and Tata Motors, aided by incipient institutional advisory firms, but never a high-profile face with financial and legal msucle.

In this backdrop, Mistry’s role may be of historic significance, if he takes up corporate governance as an issue that concerns public discourse in a democracy than as one involving privately defined values in trusts.

(The author is a senior journalist. He tweets as @madversity)

First Published On : Dec 20, 2016 10:22 IST

7.98 crore rupees recovered from 15 bank lockers in Pune, CBI registers case

<!– /11440465/Dna_Article_Middle_300x250_BTF –>Had it not been for credible intelligence received by the Central Bureau of Investigation (CBI), smooth but illegal transactions taking place in the Parvati Towers of Parvati Gaon in Pune would have taken quite some time to get noticed.The probe agency on Monday registered a criminal case against Sudhir Puranik, director of Worldwide Oilfield Machine (WOM) Pvt Ltd, a multinational companywith its headquarters based in Houston, Texas and other unknown officials of the Bank of Maharashtra (BOM) for allegedly obtaining new currency notes to the tune of rupees 7.98 crores.Interestingly, the WOM office as a BOM branch is located in the same compound and the alleged exchange of new currency notes had been taking place smoothly since November 8, the day Prime Minister Narendra Modi announced the demonitization measures. The lid finally blew off when the Income Tax department conducted a raid on the Parvati branch of BOM and recovered a whopping 7,97,95,500 crore rupees from 15 lockers maintained in the name of WOM.Among other accused in the case are Mangesh Annachhatra the Chief Executive Officer of WOM and Satyen Gathani of the Ishaniya Hyundai Motors.The WOM, as per official company records,is a private limited company incorporated on December 19, 1985 with a registered address as 6th floor of Parvati Towers. The multi-national company deals in manufacture of special purpose machinery, such as gate valves and has facilities in Aberdeen, Scotland, Dubai, UAE and Singapore.Gathani, too is a designated partner in Pune-based Ishanya Motors Llp, a company dealing in sale,maintenance and repair of motor vehicles and retail sale of automotive fuel.According to the CBI, Sudhir, Annachhatra and Gathan, along with unknown bank officials, entered into a criminal conspiracy to obtain the note including the newly introduced 2000 and 500 rupee notes. Sources in the probe agency said that Gathani had obtained the notes from various other banks and had been handing over the same to Sudhir who filled the lockers with the same.According to CBI, the accused were booked under IPC sections 420 (cheating) and 120 B (criminal conspiracy) as well as other sections of the Prevention of Corruption Act.

Tata crisis

India’s Tata Sons has sacked its boss, but he still runs several parts of the business. So what now?

Tata Sons seeks to oust ex-chairman Mistry from boards of Tata group companies | Reuters

Tata Sons seeks to oust ex-chairman Mistry from boards of Tata group companies | Reuters

Updated: Nov 11, 2016 20:27 IST

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By Aditi Shah and Abhirup Roy
| MUMBAI

MUMBAI Tata Sons has called shareholder meetings at group companies including Tata Motors and Tata Steel in an attempt to drive out former chairman Cyrus Mistry from the operating businesses of the $100 billion steel-to-software conglomerate. Tata Motors Ltd, which owns luxury brand Jaguar Land Rover, said on Friday Tata Sons had called an extraordinary general meeting (EGM) to vote on ousting Mistry as a director on the board of the automaker.Tata Sons has a 26.51 percent stake in Tata Motors.Holding company Tata Sons has also called EGMs at Indian Hotels CO, a Tata company that owns the Taj chain of hotels; Tata Consultancy Services (TCS); Tata Chemicals Ltd, and Tata Steel Ltd in a bid to vote Mistry off the boards of those businesses.Tata Sons ousted Mistry as its chairman last month. While no immediate reasons were given, it was widely reported the holding company was unhappy with some of Mistry’s actions, such as the sale of assets across group companies. This led to a bitter war of words between the two camps.Infrastructure company Shapporji Pallonji, owned by Mistry’s family, is a minority shareholder in Tata Sons and he remains a director on the board of the holding company.STEEL LOSSES

On Thursday, Tata Sons removed Mistry as chairman of its main cash cow, TCS, where the holding company has a stake of more than 70 percent. Mistry remains, however, a director on the board of TCS.Tata Sons has faced setbacks in its campaign against Mistry. The boards of both Indian Hotels and Tata Chemicals have both backed him to remain as chairman of those group companies.Tata Sons is also seeking to remove Nusli Wadia, chairman of textile-to-aviation conglomerate the Wadia Group and a long-time independent director at several Tata group companies, from the boards of Tata Motors, Tata Chemicals and Tata Steel.Wadia was reported to have voted in favour of retaining Mistry as the chairman of Tata Chemicals on Thursday.

On Friday, television news reports said a board meeting at Tata Steel to discuss second-quarter results had not taken a stance on the possible removals of Mistry and Wadia.Tata Steel posted a consolidated net loss of 493.8 million rupees ($7.34 million), mainly due to a weak performance in its UK steel making business. It has been in talks since July over potentially merging its European steel business, which also includes a steel mill in the Netherlands, with Germany’s ThyssenKrupp.Lawyers have said removing Mistry as director of Tata group companies will be a bigger challenge than ousting him as Tata Sons chairman because he will have the right to be heard at an EGM and can also ask for an injunction.

All shareholders are invited to the EGMs and the decision will be made by a simple majority. “This sort of a move is very unprecedented. I don’t know why the Tatas are doing it this way. They should be settling this instead of dragging this in public. Mistry has a lot of insider information,” a senior lawyer at a top corporate law firm in India said on condition of anonymity. Details of EGMs are yet to be finalised.Mistry’s office did not respond to a request for comment. ($1 = 67.2705 Indian rupees) (Additional reporting by Euan Rocha; Editing by Rafael Nam and Mark Potter)

This story has not been edited by Firstpost staff and is generated by auto-feed.

First Published On : Nov 11, 2016 20:27 IST

Tata tries to oust Cyrus Mistry from subsidiaries

Tata Sons is trying to force out its former chairman, Cyrus Mistry, from all parts of its business, as the bitter feud continues.

Returning land to Singur farmers almost complete: Mamata Banerjee

<!– /11440465/Dna_Article_Middle_300x250_BTF –>West Bengal Chief Minister Mamata Banerjee on Wednesday said as much as 846 acres of the 997.11 acres of land acquired by Tata Motors for a small car project at Singur in Hooghly district had been returned to the farmers after dismantling the factory shed on it.”Of the remaining land, there is a dispute regarding about 71 acres. Either there is no existence of it or some fake people had taken money against it. If the genuine claimants come forward to take it back, the administration will take steps accordingly,” she said after visiting the site. “Nobody had claimed for the return of the land till the last day on which such claims were to be made, which was today,” the Trinamool Congress (TMC) supremo said.The Supreme Court had, on August 31, ordered that the land acquired by Tata Motors in Singur be returned to the farmers within 12 weeks. The chief minister’s visit to Singur today was to thank the Hooghly district administration for completing the task within the stipulated time “against all odds”.She also assured the government officials and others involved in executing the order during festival time that they would be “adequately compensated by way of holidays and other benefits”.On October 20, Banerjee had formally started the process of returning land by handing over the physical possession of 90 acres to 2,216 farmers. On that day, she had also symbolically commenced farming on the land by sprinkling mustard seeds on it.

Cyrus Mistry-Ratan Tata tussle: Investors lose Rs 51,614 cr in 3 days as shares tumble

Following the Ratan TataCyrus Mistry tussle and the sacked chairman of Tata Sons shooting off a damning letter on Tuesday to the company board, several Tata group stocks are in the dock leading to persisting weakness on the bourses over the last three sessions.

As things continue to get murkier by the day with the ousted chairman coming out in open alleging discrepancies in several group companies, investors are hastily scurrying for cover in order to trim their losses.

ReutersReuters

Reuters

At 12:30 pm, Tata stocks have fallen up to 9 percent even as the broad market remained about xxx percent.

Tata Tele Maharashtra was the biggest loser among the pack, tumbling 9.1 percent. Shares of Indian Hotels Corp dropped 5.4 percent, Tata Investment Corporation 5 percent, Tata Global Beverages 4.7 percent and Tata Sponge Iron 3.6 percent.

Among the Sensex constituents, Tata Motors fell the most, dropping 2.1 percent to Rs 518.65, even though the company has been one of the two group firms (the other is TCS) which is consistent in delivering robust earnings.

Tata Steel and TCS shares were down around a percent each at Rs 395.05 and Rs 2,376.45, respectively.

Over the last three sessions, including today’s fall, several Tata shares felt the heat, losing over 4-12 percent each.

Tata Metaliks plunged 12.6 percent in three sessions, while Indian Hotels Corp tanked 11.5 percent, Tata Motors slipped 6.7 percent and Tata Communications tumbled 6 percent.

Tata Group stock performance - OCt 27, 2016Tata Group stock performance - OCt 27, 2016

Trent, Nelco, Oriental Hotels, Rallis India, Tata Chemicals, Tata Steel and Voltas were the other laggards, dropping 3-7 percent each during the period under review.

In last three sessions, the 27 listed stocks of the group collectively lost Rs 51,614 crore in market capitalisation. Of the lot, Tata Motors took the maximum beating as investors wealth in the counter eroded by a steep Rs 30,018 crore. Other big Tata stock that bore the brunt of investor selling was TCS, which resulted in its m-cap falling by Rs 8,800 crore.

Mistry in his letter to Tata board on Wednesday had listed out group companies such as Indian Hotel, Tata Motors PV, Tata Steel Europe, Tata Power Mundra and Tata Teleservices as ‘legacy hotspots’. According to him, the fair value of the legacy hotspots would result in a write-down of Rs 118,000 crore.

According to analysts, Tata group shares may remain weak for some more time, especially after the outgoing chairman highlighted several worrying factors at several group companies, weighed down by increasing debt level and subdued business proposition.

Combating climate change: India Inc increases focus on reducing carbon emission

Mumbai: Corporates are increasing focus on setting emission reduction and renewable energy targets besides putting up an internal price on carbon as part of risk mitigation, says a report.

According to CDP’s latest climate change report, as many as 47 firms on the BSE 200 index have disclosed information related to climate change as against 34 companies in 2010.

Representational image. Reuters

Representational image. Reuters

The report assumes significance following India, the world’s third-largest emitter of greenhouse gases, ratifying the landmark Paris climate deal earlier this month, giving a significant push for the agreement to come into force.

CDP, through a study of these 47 companies, has found that there is an increasing focus on setting emission reduction and renewable energy targets with 38 companies reporting current targets for a cut in emission.

About 15 of the 38 companies have short term emission target (till year 2020).

“Our analysis indicates that there is clear evidence of increasing focus on voluntary emission reduction targets and growing interest for renewable energy sourcing demonstrating long-term vision amongst companies,” CDP said.

The report noted adding that two companies, Infosys and Tata Motors, have committed to a 100 percent renewable energy consumptions target by 2018 and 2030 respectively.

Besides, it was found that companies are setting an internal price on carbon.

“In India, 15 percent of the responding companies currently put a price on their carbon emissions and 43 percent are planning to set a price on carbon within next two years,” the report said.

Further, CDP said the majority of the companies have at least one emission reduction initiative at implementation stage with the highest number of such steps from energy, materials and information technology sector.

Interestingly, companies saw a 57 percent jump in estimated monetary savings year-on-year from emission reduction initiatives.

The Paris agreement was signed in New York in April by 175 countries at the largest, single-day signing ceremony in history.

US, China, European Union, Brazil are the other biggest carbon emitters in the world.

The CDP (formerly known as Carbon Disclosure Project) is an organisation which works with shareholders and corporations to disclose the greenhouse gas emissions of major corporations.

Full text of Cyrus Mistry’s letter to Tata Group: My sacking illegal, invalid, will hurt company image

Full text of Cyrus Mistry’s letter to Tata Group: My sacking illegal, invalid, will hurt company image

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Sacked Tata Sons chairman Cyrus Mistry has said in a letter to the company board that the inherited problems of the salt-to-software conglomerate had pushed him  “into the position of a ‘lame duck’ chairman” and that he cannot believe with the he was removed on grounds of non-performance.

Cyrus Mistry. ReutersCyrus Mistry. Reuters

Cyrus Mistry. Reuters

CNBC-TV18 has got the possession the five-page letter sent on Tuesday, a day after the sacking happened. However, the TV channel has said that it has not independently verified the authenticity of Mistry’s letter.

Mistry argued in the letter that under his term, Tata companies’ net worth rose to Rs 42,000 crore from Rs 26,000 crore earlier. The group’s operating cash flows grew at 31 percent compounded annual growth rate.

According to him, a realistic assessment of 5 Tata companies, namely Indian Hotels Company, Tata Motors PV, Tata Steel Europe, Mundra Ultra Mega Power Project and Tata TeleServices, can lead to nearly $18 billion write-down.

He has also reminded the board that lack of explanation has led to all kinds of speculation and harmed his own and the group’s reputation.

You can read the entire letter below:

Cyrus Mistry by Firstpost on Scribd

Jaguar Land Rover and Ford test connected cars in Britain | Reuters

Jaguar Land Rover and Ford test connected cars in Britain | Reuters

Updated: Oct 21, 2016 04:37 IST

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LONDON Jaguar Land Rover, Ford (F.N) and Tata Motors (TAMO.NS) are testing connected cars which can communicate with each other using technology designed to speed up journeys and cut accidents, the first such trials in Britain.Cars which are able to warn drivers when another connected vehicle brakes suddenly and those which can monitor traffic signals and regulate their speed to encounter fewer red lights were being showcased at a testing ground in central England.Increasingly sophisticated technology in vehicles is paving the way for fully driverless vehicles, with Jaguar Land Rover (JLR), owned by India’s Tata Motors, also demonstrating a self-driving Range Rover Sport which can automatically overtake slower moving cars. “The benefits of having cars that can communicate with each other and their surroundings could be very significant — from increased road safety to improved traffic flow,” said Tim Armitage, a project director at government-backed UK Autodrive which coordinated the trials.

Earlier this month, a driverless car was trialled on Britain’s streets for the first time as part of government efforts to create an industry which can serve a worldwide market which it estimates to be worth up to 900 million pounds ($1.1 billion) by 2025. Britain is aiming to have driverless cars on its roads by the end of the decade.

Automakers are racing to head off the challenge from technology firms such as Alphabet Inc’s (GOOGL.O) Google, which is developing autonomous vehicles. Jaguar Land Rover said earlier this year that it plans to create a fleet of more than 100 research vehicles over the next four years to test autonomous and connected technology and Volvo plans to trial driverless cars in London next year.

Ford and Volvo are working with ride-hailing company Uber on trials of self-driving cars in the U.S city of Pittsburgh. (Reporting by Costas Pitas; Editing by Keith Weir)

This story has not been edited by Firstpost staff and is generated by auto-feed.

Ban on big diesel cars, SUVs not the right way: Prakash Javadekar

Environment Minister Prakash Javadekar on Wednesday said the ban on diesel cars and SUVs with engines above 2,000cc in Delhi-NCR by courts “is not the right way”.Calling it “unfortunate”, he said the government is already taking measures to curb pollution and the ban has resulted in vehicles with latest technologies not being allowed while old polluting vehicles continue plying on the roads.<!– /11440465/Dna_Article_Middle_300x250_BTF –>”I am very sure that courts will also appreciate that there has to be a certainty of policy and execution. Policy and execution are the job of the executive, legality of any decision is the job of the judiciary,” Javadekar said.He further said: “Legislature’s job is to legislate and these are the few organs, which are created by the constitution, which must work independently. We must sustain each other and we must work independently that is the real need of the hour. When all will move in one direction, we will achieve goals more than what we have planned to achieve.”Commenting on the ban imposed on registration of big diesel cars and SUVs in Delhi-NCR since December last year, the minister did not refer to the Supreme Court by name but just mentioned courts and the NGT.”I think that this is not the right way, it’s unfortunate …court also needs to appreciate that because you are banning the latest vehicles and old vehicles are plying on the roads that are more polluting,” he said.Javadekar was apparently referring to the Supreme Court, which has extended the ban until the next hearing which is expected in July. Air pollution has not increased only in last two years. It has aggravated over the last ten years, he added.”Judiciary now should also appreciate that the government has taken steps…(like) migration to Euro VI to fight pollution,” the minister added.He further said: “In the environment ministry we have made emission norms more stringent practically for all industries and that’s the right direction in controlling pollution. So we are taking decisions we are making all efforts.”Javadekar was speaking at the inauguration of a new Rs 100-crore plant of Force Motors from where the company will supply engines and axles to Mercedes-Benz India.

A tale of 2 acquisitions in 9 charts: Tata Steel’s failure with Corus and Tata Motors’ success with JLR

It is a tale of two acquisitions by the same group. While one failed miserably, the other succeeded surprisingly.

The stories are about Tata Steel’s acquisition of Anglo Dutch major Corus and Tata Motors’ buyout of Jaguar Land Rover (JLR) of the UK.

Here’s how the stories unfolded.

Tata Steel completed acquisition of Corus on 2 April 2007, at the peak of the boom that ended with the Global Financial Crisis in 2008, from which the world economy never recovered.

The company early on Wednesday said it is exploring “all options for portfolio restructuring, including the potential divestment of Tata Steel UK, in whole or in parts”. Corus was renamed Tata Steel Europe in 2010.

ReutersReuters

Reuters

The decision to sell the UK business comes at a time when the global economy is staring at a further recession, this time driven by a Chinese meltdown.

Explaining the rational behind the decision, Tata Steel said in a statement: While the global steel demand, especially in developed markets like Europe, has remained muted following the financial crisis of 2008, trading conditions in the UK and Europe have rapidly deteriorated more recently, due to structural factors including global oversupply of steel, significant increase in third country exports into Europe, high manufacturing costs, continued weakness in domestic market demand in steel and a volatile currency.

In simple terms, what the company is saying is that cheap Chinese steel dumped across the globe has rendered the business unviable in the face of the continuing financial crisis impact.

For the beginners, Corus acquisition paved the way for the Tatas to enter the UK steel sector. The acquisition was preceded by an unprecedented takeover battle with Brazilian major CSN.

Here’s how the battle played out: The Tata group confirmed its interest in Corus on 5 October 2006 and proposed a bid of 455 pence a share in cash on 17 October. On 17 November, CSN offered 475 pence. In response, Tatas upped the bid to 500 pence a share. Then CSN raised the bid to 515 pence a share. As the bidding war heated up, UK Takeover Panel decided to auction the company on 30/31 January. In a nail-biting finish for the seven-hour long bidding war, the Tata group won offering 608 pence a share, 34 percent higher than its original bid. The total payment was $12.1 billion (Rs 53,580 crore at the then exchange rate), of which $6 billion was debt.

Justifying the price the company paid, then group chairman Ratan Tata said in an interview to the Business Standard: Investors came in and increased the price. We have to pay for getting the company. As a prudent management, we had taken a view that we would not go beyond a point. We did not reach that point. Had we reached, we would have walked away. Overbidding or not is subjective when it comes to a judgement call.

Stock investors were not happy with Tata Steel’s aggressive bidding. Right from the day the Tatas expressed their keenness to buy Corus on 5 October 2006, investors had pummelled the stock. Over the next six months the stock fell 21 percent. A day after the Indian company won the bid, the stock fell 11 percent. Over a month, it fell 20 percent.

Ratan Tata, however, defended his group’s decision, saying the market is taking a short-term view and is being harsh.

“We often damn a company when it makes a loss in a single year. We applaud a company when it makes an extraordinary profit. But the life of a corporation is much longer than a single year,” he told Business Standard.

However, at least in the case of Tata Steel, the markets seem to have been bang on target with the bearish view.

Here are eight graphics that shows how the acquisition dented the fortune of the Tata Steel group:

TataSteelturnoverTataSteelturnover

The share of Tata Steel Europe’s turnover in the total turnover of the group has declined steadilty from 2007-08, when it stood at 76.2 percent. In 2014-15, the share was down to 57.3 percent. While Tata Steel group witnessed a 6 percent growth in turnover over the period, Tata Steel Europe saw a 20 percent decline in turnover. Clearly, Tata Steel Europe has been a drag on the group.

TataSteelebitdaTataSteelebitda

As far as operating profit is concerned, Tata Steel group saw a decline of 30 percent between 2007-08 and 2014-15. Tata Steel Europe, meanwhile witnessed a sharper 53 percent decline. In 2007-08, a year before the global financial crisis started, the foreign subsidiary had a 50 percent contribution to overall Ebitda. The business never went back to that level of operating profit after that. The share in 2014-15 stood at 33.6 percent. In 2015-16 up to December, the group’s consolidated EBITDA stood at Rs 11,165 crore. Tata Steel Europe, meanwhile, reported an operating loss of Rs 339 crore.

TataSteeldebtTataSteeldebt

If there is one number that has grown phenomenally for the group, it is debt. From Rs 53,625 crore in 2007-08, it has grown 40 percent to Rs 75,118 crore in 2015-16 (up to December).

TataSteelnetprofitTataSteelnetprofit

The group’s earnings ever since the acquisition has yo-yoed between profit and loss. In 2007-08, the group registered a net profit of Rs 12,350 crore. This fell 60 percent to Rs 4,951 crore in the next year. Then there was a loss of Rs 2,009 crore and in 2010-11, the group swung back to profit of Rs 8,983 crore. In the course of nine financial years, the group was in profit in 6 times.

TataSteelmcapTataSteelmcap

Tata Steel share price on the BSE has more than halved from Rs 693.15 in 2007-08 to Rs 324.4 currently. Its market cap eroded 38 percent during the period from Rs 50,640 crore to Rs 31,506 crore currently. After the company announced the decision to sell the UK business the stock has gained 5.26 percent.

TataSteeloutputTataSteeloutput

TataSteelshipmentTataSteelshipment

The above two graphics show how the Tata Steel Europe suffered as demand for steel continued to be weak after the global financial crisis. The company’s production never hit 20 million tonne recorded in 2007-08. In fact, the output hovered around 13-15 million tonne for the last seven years. Overall, the output witnessed a 24 percent fall over eight years from 2007-08. Shipments, meanwhile, declined a sharper 41 percent.

According to this article in Bloomberg citing Gladfly estimates, the European operations have lost almost $5 billion since 2010. Given the ballooning debt of the group, the sale decision does not come as a surprise, says the article.

Contrasting story of JLR

JLR was acquired by Tata Motors in June 2008 for $2.3 billion, also ahead of the financial crisis. However, the company managed to pull off despite the crippling crisis.

tata JLR turnovertata JLR turnover

JLR’s turnover has been increasing steadily from 4,949 million pounds in 2008-09 to 21,866 million pounds in 2014-15. In the seven years’ time, JLR has been in operating loss only once – in 2008-09. In 2009-10, the company swung to an operating profit of 51.40 million pounds. This number has been on a steady rise. So is the case with profit after taxes. After the acquisition of JLR, Tata Motors’ consolidated turnover grew 257 percent from 2008-09 to 2014-15. Also the company turned around from a loss of Rs 2,505 crore in 2008-09 to profit of Rs 13,986 crore in 2014-15.

tata JLR profittata JLR profit

Interestingly, the common factor in both the stories – one of failure and the other of success – is China. While it is the Chinese dumping that brought Tata Steel down, it is the boom in the Chinese auto market that boosted JLR’s fortunes.

Gujarat government declares workers’ strike at Tata Nano plant as illegal

Ahmedabad: With the workers’ strike at Tata Nano plant at Sanand entering the 10th day on Thursday, the Gujarat labour department declared it as illegal and referred the matter to the industrial tribunal here for resolution.

“We issued the order declaring the strike illegal under the Prohibition of Industrial Disputes Act to both management and the union leader. If the workers continue the strike, we can issue show-cause notice and lodge a criminal case against them,” said assistant labour commissioner M S Patel.

Representative image. ReutersRepresentative image. Reuters

Representative image. Reuters

A Tata Motors official said that with the prohibitory order in place, the company hoped that normalcy will return.

“Today we received an official order from government prohibiting the strike and workers were also given a copy of the order but no discussion could take place due to the time issue. We believe normalcy will be restored tomorrow,” a company spokesperson said.

The labour department has referred the matter to the industrial tribunal to decide if suspension of 28 workers was justified and if the striking workers should be paid wages.

Some 420 workers at the plant went on strike on February 23 demanding reinstatement of suspended workers. The company had first suspended two workers for indiscipline, and 26 others later when the protesting workers allegedly damaged new vehicles inside the plant.

Shah said an inquiry was being conducted to find out who damaged the cars. “The workers are demanding reinstatement of suspended workers, but from our side the concern has been damage done to some of the vehicles….there cannot be compromise on safety, productivity and discipline,” Shah said.

Harpalsingh Zala, spokesperson of striking workers, said, “We have received the letter but have not yet decided whether to call off the strike. The matter is under discussion.”
The Nano plant, which was originally to be set up in West Bengal, was later shifted to Gujarat. The company recently scaled down production of Nano cars to 2.5 lakh per year and announced plans to produce other models at the plant.

PTI

Ambassador is the ‘real Indian’ car, says UAE Minister

The Ambassador car may no longer be produced, but for a visiting UAE Minister the iconic vehicle, which is in the fading memory of people, is an “original Indian” car.”This is original Indian car,” the UAE Cabinet Affairs Minister Mohammad Al Gergawi said sitting in the Ambassador car arranged for him at his request at a luxury Hotel in Kochi on Friday evening.He recalled his first ride in ambassador, which had ruled the Indian roads for more than five decades, during his maiden visit to the country several years ago.<!– /11440465/Dna_Article_Middle_300x250_BTF –>When Al Gergawi got out of the Hotel room, a luxury Benz car of Kerala government was ready to take him to a dinner organised by Gulf-based Keralite business tycoon M A Yusuf Ali at his residence.Though he got into the luxury car, he expressed his wish to travel in the Ambassador car which was specially arranged for him by Yusuf.The car was made part of his convoy after Al Gergawi informed his wish to the businessman before commencing his Kerala visit.Hindustan Motors, makers of the Ambassador, suspended production of the car two years ago because of debt and decreased demand from Indian consumers, who now have a wide range of choice from overseas auto makers.

Pathankot attack may be aimed at disrupting India-Pak ties: China

“We believe that India and Pakistan should work together to maintain positive momentum. We condemn all forms of terrorism and we believe all sides should enhance dialogue and cooperation to combat all forms of terrorism,” she said. Heavily-armed Pakistani terrorists on Saturday attempted to storm the Indian Air Force base in Pathankot. The attackers were believed to have infiltrated from Pakistan and there was speculation that they may belong to Jaish-e-Mohammad headed by Maulana Masood Azhar of the Kandahar hijack episode.

PTI
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20 people injured in Assam as earthquake hits Northeast, buildings develop cracks

A major earthquake with a magnitude of 6.7 on the Richter Scale rocked Eastern and North-Eastern parts of India early today, the Indian Meteorological Department said. The quake occurred at 4.35 am at a depth of 17 km below the ground and the epicentre is located at Tamenglong of Manipur.

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