MUMBAI (Reuters) - Two Tata group companies, Tata Steel Ltd and Indian Hotels Co on Thursday said their financial statements present a true and fair value of their respective companies, in response to stock exchange requests for clarification.
The exchanges made the requests after the former chairman of parent Tata Sons Ltd [TATAS.UL], Cyrus Mistry, on Wednesday said the group could face an $18 billion writedown, partly related to the acquisition of its European steel business. Mistry was ousted in a surprise development at Tata on Monday.
“As part of the preparation of financial assets, the value-in-use of the assets of the Company is tested for impairment as per the Accounting Standards,” Tata Steel said in a statement to India’s bourses, the National Stock Exchange and the Bombay Stock Exchange.
Indian Hotels Co, the Tata firm running the group’s luxury hotels and resorts, later sent a similar response, saying the “financial statements of the company are prepared on a going concern basis and present a true and fair view of the state of affairs of the company”.
Following his ouster, Mistry, in a letter to directors of Tata Sons, wrote that foreign properties of Indian Hotels had been sold at a loss and termed the company’s international strategy as “flawed”.
He blamed family patriarch and the company’s current interim chairman Ratan Tata for making “emotional” decisions that have left the parent company saddled with debt.
Late on Wednesday, Tata Power in its response to the exchanges said it has noted the comments made in Mistry's letter about its Mundra project, adding it had "no further comments to offer". (bit.ly/2eOKBAa)
Reporting by Promit Mukherjee and Tanvi Mehta; Editing by Kenneth Maxwell