Tatas’ strong letter wants US hotel chain to apologise

By IANS

New Delhi : The $29-billion Tata group has demanded an apology for what it calls “libellous language” by the US-based Orient-Express Hotels, after the latter’s “fossilised” thinking spurned an offer for a strategic alliance.


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The Indian hotel group, a minority shareholder in Orient-Express Hotels, Trains and Cruises, has also approached the US markets watchdog Securities and Exchange Commission (FCC), with which it has formally filed its protest letter.

“We ask the Orient-Express to publish a formal apology using the same channels used to publicise its letter to Taj Hotels, including posting the apology on its website,” wrote R.K. Krishna Kumar, vice chairman of Indian Hotels.

“We expect these actions to take place immediately,” Kumar wrote Paul M. White, president and chief executive of Orient-Express Hotels in response to the latter’s remarks earlier this month.

“We can only infer from these actions that your aim was to ensure that as many people as possible saw your carefully chosen and libellous language,” said Kumar in the letter, a copy of which was obtained by IANS.

Indian Hotels and its subsidiaries are collectively known as Taj Hotels Resorts and Palaces. The group runs 59 hotels at 40 locations in India with additional 17 abroad in countries like the US, Britain, Mauritius, Malaysia and Australia.

The group had acquired a 10 percent stake in Orient-Express Hotels in September 2007 and subsequently increased it to 11.5 percent to establish the foundation for discussions on future strategies.

But White said his group did not believe there was a strategic fit between the “predominantly domestic Indian hotel chain” and the global luxury portfolio of Orient Express Hotels.

This had led to strong reaction not just from the Tata group, but also from top corporate leaders, industry chambers and some government officials.

“Taj Hotels invested a considerable amount of time and resources based upon our belief that working together would yield better value for both organisations,” Kumar shot back, adding that this, unfortunately, was their mistaken belief.

“You have claimed that Taj Hotels had sought to obtain Orient-Express Hotels’ inputs to improve the performance of our international properties. We certainly did not need any of that,” he said.

“Had you and your board taken time to review the facts about our business and our proposal, you would have seen that this is not the case,” Kumar said, adding the action did not meet the needs of shareholders and corporate governance.

“Taj Hotels is a proud Indian company and it will persevere with its global expansion strategy,” he said.

“Indian companies will continue to play a meaningful role in the ongoing global economic integration and in that environment will take their rightful place in the international arena,” Kumar said.

“We believe that those with a fossilised frame of mind risk being marginalized.”

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