Tata Capital Financial Services on Friday said secured term loans to Siva Industries and Holdings Ltd (SIHL) and Siva Ventures Ltd (SVL) aggregating Rs 200 crore were sanctioned by the investment panel of its Board and due processes were followed, refuting the allegation of former Tata Sons chairman Cyrus Mistry that the loan was given on the “strong advice” of an executive trustee.
This loan facility was sanctioned by the Investment Credit Committee of the Board, Tata Capital 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. The facility was settled in June 2014 and due disclosures were made in the audited financial statements of the company,” it said.
In his letter to the board of Tata Sons a day after he was sacked as the chairman of Tata Sons, Mistry had written that “Tata Capital had a book that required significant clean up on account of bad loans to the infrastructure sector”. “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,” Mistry alleged in the letter.