Yanis Varoufakis
Friday, 23 December 2016
World’s largest hedge fund to replace managers with artificial intelligence
Olivia Solon in The Guardian
The world’s largest hedge fund is building a piece of software to automate the day-to-day management of the firm, including hiring, firing and other strategic decision-making.
Bridgewater Associates has a team of software engineers working on the project at the request of billionaire founder Ray Dalio, who wants to ensure the company can run according to his vision even when he’s not there, the Wall Street Journal reported.
'This is awful': robot can keep children occupied for hours without supervision
“AI will ultimately prove to be cheaper, more efficient, and potentially more impartial in its actions than human beings,” said the authors writing up the results of the survey in Harvard Business Review.
However, they didn’t think there was too much cause for concern. “It just means that their jobs will change to focus on things only humans can do.”
The authors say that machines would be better at administrative tasks like writing earnings reports and tracking schedules and resources while humans would be better at developing messages to inspire the workforce and drafting strategy.
Fidler disagrees. “There’s no reason to believe that a lot of what we think of as strategic work or even creative work can’t be substantially overtaken by software.”
However, he said, that software will need some direction. “It needs human decision making to set objectives.”
Bridgewater Associates did not respond to a request for comment.
The world’s largest hedge fund is building a piece of software to automate the day-to-day management of the firm, including hiring, firing and other strategic decision-making.
Bridgewater Associates has a team of software engineers working on the project at the request of billionaire founder Ray Dalio, who wants to ensure the company can run according to his vision even when he’s not there, the Wall Street Journal reported.
“The role of many remaining humans at the firm wouldn’t be to make individual choices but to design the criteria by which the system makes decisions, intervening when something isn’t working,” wrote the Journal, which spoke to five former and current employees.
Ray Dalio, president and founder of Bridgewater Associates. Photograph: Bloomberg/Bloomberg via Getty Images
The firm, which manages $160bn, created the team of programmers specializing in analytics and artificial intelligence, dubbed the Systematized Intelligence Lab, in early 2015. The unit is headed up by David Ferrucci, who previously led IBM’s development of Watson, the supercomputer that beat humans at Jeopardy! in 2011.
The company is already highly data-driven, with meetings recorded and staff asked to grade each other throughout the day using a ratings system called “dots”. The Systematized Intelligence Lab has built a tool that incorporates these ratings into “Baseball Cards” that show employees’ strengths and weaknesses. Another app, dubbed The Contract, gets staff to set goals they want to achieve and then tracks how effectively they follow through.
These tools are early applications of PriOS, the over-arching management software that Dalio wants to make three-quarters of all management decisions within five years. The kinds of decisions PriOS could make include finding the right staff for particular job openings and ranking opposing perspectives from multiple team members when there’s a disagreement about how to proceed.
The machine will make the decisions, according to a set of principles laid out by Dalio about the company vision.
“It’s ambitious, but it’s not unreasonable,” said Devin Fidler, research director at the Institute For The Future, who has built a prototype management system called iCEO. “A lot of management is basically information work, the sort of thing that software can get very good at.”
Automated decision-making is appealing to businesses as it can save time and eliminate human emotional volatility.
“People have a bad day and it then colors their perception of the world and they make different decisions. In a hedge fund that’s a big deal,” he added.
Will people happily accept orders from a robotic manager? Fidler isn’t so sure. “People tend not to accept a message delivered by a machine,” he said, pointing to the need for a human interface.
“In companies that are really good at data analytics very often the decision is made by a statistical algorithm but the decision is conveyed by somebody who can put it in an emotional context,” he explained.
Futurist Zoltan Istvan, founder of the Transhumanist party, disagrees. “People will follow the will and statistical might of machines,” he said, pointing out that people already outsource way-finding to GPS or the flying of planes to autopilot.
However, the period in which people will need to interact with a robot manager will be brief.
“Soon there just won’t be any reason to keep us around,” Istvan said. “Sure, humans can fix problems, but machines in a few years time will be able to fix those problems even better.
“Bankers will become dinosaurs.”
It’s not just the banking sector that will be affected. According to a report by Accenture, artificial intelligence will free people from the drudgery of administrative tasks in many industries. The company surveyed 1,770 managers across 14 countries to find out how artificial intelligence would impact their jobs.
The firm, which manages $160bn, created the team of programmers specializing in analytics and artificial intelligence, dubbed the Systematized Intelligence Lab, in early 2015. The unit is headed up by David Ferrucci, who previously led IBM’s development of Watson, the supercomputer that beat humans at Jeopardy! in 2011.
The company is already highly data-driven, with meetings recorded and staff asked to grade each other throughout the day using a ratings system called “dots”. The Systematized Intelligence Lab has built a tool that incorporates these ratings into “Baseball Cards” that show employees’ strengths and weaknesses. Another app, dubbed The Contract, gets staff to set goals they want to achieve and then tracks how effectively they follow through.
These tools are early applications of PriOS, the over-arching management software that Dalio wants to make three-quarters of all management decisions within five years. The kinds of decisions PriOS could make include finding the right staff for particular job openings and ranking opposing perspectives from multiple team members when there’s a disagreement about how to proceed.
The machine will make the decisions, according to a set of principles laid out by Dalio about the company vision.
“It’s ambitious, but it’s not unreasonable,” said Devin Fidler, research director at the Institute For The Future, who has built a prototype management system called iCEO. “A lot of management is basically information work, the sort of thing that software can get very good at.”
Automated decision-making is appealing to businesses as it can save time and eliminate human emotional volatility.
“People have a bad day and it then colors their perception of the world and they make different decisions. In a hedge fund that’s a big deal,” he added.
Will people happily accept orders from a robotic manager? Fidler isn’t so sure. “People tend not to accept a message delivered by a machine,” he said, pointing to the need for a human interface.
“In companies that are really good at data analytics very often the decision is made by a statistical algorithm but the decision is conveyed by somebody who can put it in an emotional context,” he explained.
Futurist Zoltan Istvan, founder of the Transhumanist party, disagrees. “People will follow the will and statistical might of machines,” he said, pointing out that people already outsource way-finding to GPS or the flying of planes to autopilot.
However, the period in which people will need to interact with a robot manager will be brief.
“Soon there just won’t be any reason to keep us around,” Istvan said. “Sure, humans can fix problems, but machines in a few years time will be able to fix those problems even better.
“Bankers will become dinosaurs.”
It’s not just the banking sector that will be affected. According to a report by Accenture, artificial intelligence will free people from the drudgery of administrative tasks in many industries. The company surveyed 1,770 managers across 14 countries to find out how artificial intelligence would impact their jobs.
'This is awful': robot can keep children occupied for hours without supervision
“AI will ultimately prove to be cheaper, more efficient, and potentially more impartial in its actions than human beings,” said the authors writing up the results of the survey in Harvard Business Review.
However, they didn’t think there was too much cause for concern. “It just means that their jobs will change to focus on things only humans can do.”
The authors say that machines would be better at administrative tasks like writing earnings reports and tracking schedules and resources while humans would be better at developing messages to inspire the workforce and drafting strategy.
Fidler disagrees. “There’s no reason to believe that a lot of what we think of as strategic work or even creative work can’t be substantially overtaken by software.”
However, he said, that software will need some direction. “It needs human decision making to set objectives.”
Bridgewater Associates did not respond to a request for comment.
Thursday, 22 December 2016
Learn Anything In Four Steps - The Feynman Technique
1. Pick a topic you want to understand and start studying it. Write down everything you know about the topic on a notebook page, and add to that page every time you learn something new about it.
2. Pretend to teach your topic to a classroom. Make sure you're able to explain the topic in simple terms.
3. Go back to the books when you get stuck. The gaps in your knowledge should be obvious. Revisit problem areas until you can explain the topic fully.
4. Simplify and use analogies. Repeat the process while simplifying your language and connecting facts with analogies to help strengthen your understanding.
Corruption and the Tata empire
Geeta Anand in The New York Times
In India, where corruption is a fact of life, the Tata Group — a powerhouse conglomerate that makes Land Rovers, operates the historic Pierre Hotel in New York and sells the world Tetley tea — has been held up as the exception to the rule.
Its patriarch, Ratan Tata, 78, is a revered figure here, a cross between Warren E. Buffett and Bill Gates whom even schoolchildren know and look up to as Mr. Clean — the billionaire whose family built its name in part on zero tolerance for corruption.
His company symbolizes the role an ascendant India sees for itself on the global stage. In 2010 Mr. Tata arranged a $50 million donation to the Harvard Business School, the school’s largest gift from an international donor, and its dean sits on the board of the empire’s umbrella organization, Tata Sons. Mr. Tata has been knighted by Queen Elizabeth.
Now, however, Mr. Tata is caught up in a nasty public fight for control of the business — with the man he had chosen to succeed him as chairman. The company finds itself defending against serious allegations of wrongdoing.
Some of the claims have been raised by his chosen successor, Cyrus Mistry. Mr. Tata ousted Mr. Mistry in late October, saying it was necessary because “the board of Tata Sons lost confidence in him and in his ability to lead the Tata Group in the future.”
Mr. Mistry, 48, told Tata’s board in a letter that an internal audit indicated that its airline joint venture, AirAsia, had made more than $3 million in “fraudulent transactions” with two companies. In recent days, India’s Directorate of Enforcement has started an investigation into the AirAsia payments. The directorate did not respond to requests for comment.
“Never before has the Tata Group, including the philanthropic objectives of the Tata Trusts, been in jeopardy to this extent and scale,” Mr. Mistry said in a public statement this month. He said he was fighting “to protect the Tata Group from capricious decision-making by the interim chairman,” a reference to Mr. Tata.
Separately, on Friday, a crusading member of India’s Parliament, Subramanian Swamy, called in a court complaint for an investigation into allegations from a government report that Mr. Tata in 2008 used a front company to apply for a telecommunications license, potentially circumventing the limits on the number of licenses one investor could hold. This is alleged to have happened at a time of furious maneuvering among companies trying to win the rights to offer cellphone service in India — a battle that resulted in one of India’s biggest corruption scandals ever.
Ultimately the scandal helped sweep India’s founding political party, the Congress party, from power in an epic defeat.
The New York Times has reviewed government documents showing that India’s Serious Fraud Investigation Office recommended prosecuting Mr. Tata in 2013. For reasons that are not clear, the government did not file a case in court.
Ratan Tata, the patriarch of the Tata Group, in Mumbai in 2009. The conglomerate’s many elements include a leading manufacturer of trucks. CreditKunal Patil/Hindustan Times, via Getty Images
The fraud office documents, which Mr. Swamy filed as part of his court complaint, say that the Tata Group invested $250 million in eight subsidiaries of a real estate firm, Unitech — a sum roughly equivalent to the telecom license application fee. Unitech used that money to apply for a license on Tata’s behalf, the report from the government’s fraud office said.
A Tata spokesman said the company made “a bona fide real estate deal” with Unitech unrelated to telecom licenses, adding that “no evidence was found which could be attributed to any criminality.”
The Tata Group was started in 1868, when the British ruled the Indian subcontinent. The founder, Jamsetji Tata, was a descendant of Persian immigrants, known as Parsis, who form a tiny and vibrant community in Mumbai. He began with a trading business, and over the decades the company grew — building India’s first steel mill, its first hydroelectric power station, its first locally made trains and its first airline.
In 1903, Mr. Tata opened India’s first luxury hotel serving Indians, the Taj Mahal Palace Hotel, which is today considered a national landmark. In 2008 the hotel was one of the targets of the dayslong Mumbai terrorist attack by Pakistani infiltrators that shocked India and the world.
The company today has its hand in almost every business imaginable, from consulting to automobiles. Ratan Tata, the cousin of his predecessor, took over the company in 1991 at the age of 53. He became the group’s fifth chairman. He widened the group’s international presence, acquiring Corus Group, the Anglo-Dutch steel company, in 2007 and the Jaguar and Land Rover brands in 2008.
Mr. Mistry — the first non-Tata family member to lead the nearly 150-year-old company — was elevated in 2012 after a two-year search. However, in India’s tight-knit Parsi community, the ties can be close. Mr. Mistry’s family, which owns a major construction business, was the biggest shareholder in Tata Sons, with 18 percent, and Mr. Mistry had been on the board since 2006. His sister is married to Mr. Tata’s half brother.
According to several people close to Mr. Mistry, the relationship between him and Mr. Tata soured in part because Mr. Mistry had begun reining in some favors that the company had previously extended to Mr. Tata’s personal friends.
In one instance, after Mr. Mistry raised the issue, the Tata board explored starting legal proceedings against C. Sivasankaran, a longtime friend and close business associate of Mr. Tata’s, to try to recover $100 million the company said it was owed from a telecom deal. Mr. Sivasankaran also had been renting a 5,300-square-foot penthouse for $11,000, less than half the market rent, from the company, according to correspondence reviewed by The Times. Mr. Mistry raised his rent to the market rate.
Mr. Sivasankaran, in an interview, said he was indeed a friend of Mr. Tata’s. He said, though, that he had suffered financially from the investment and had no intention of paying back the $100 million he owed.
“I don’t want to pay it because Tata has not managed the company properly,” he said. “Siva is alleging the Tata Group does not have management skills,” Mr. Sivasankaran said, referring to himself in the third person.
He also confirmed that he was ousted from the luxury apartment. Mr. Sivasankaran said he had a long-term contract to stay there, so he could have fought to stay, but decided to go quietly.
Another issue at Tata involved no-bid dredging, shipping and barge contracts granted to companies belonging to another of Mr. Tata’s longtime friends, Mehli Mistry, according to three people who have reviewed company documents. (He and Cyrus Mistry, the ousted Tata executive, are cousins.) Cyrus Mistry allowed the contracts to be put up for bid once they expired, according to the people who have reviewed the documents.Continue reading the main story
Photo
Outside a Tata Motors plant in Pune, India. CreditAtul Loke for The New York Times
A Tata Group spokesman referred questions to Tata Power, the unit that made the contracts. Tata Power did not respond to requests for comment.
Mehli Mistry, through a lawyer, said that the contracts were not the result of his friendship with Mr. Tata, and disputed that they were not fairly valued.
The Cellphone Allegations
From a corporate perspective, the most consequential allegations regarding Mr. Tata and the group are those contained in the 33-page report from the Serious Fraud Investigation Office asserting that Mr. Tata’s group was the real applicant behind a telecom license secured by Unitech, the New Delhi real estate company.
A decade ago, India pried open its notoriously dysfunctional telecom market. In the days before deregulation, it could take a customer years just to get a new phone number. People would hang on to their phone lines like family jewels and hand them down to relatives.
Against that backdrop, investors saw a once-in-a-generation opportunity to build an Indian phone empire. But applicants could seek only one license. And the Tata Group had already applied for a different one.
The report says that Tata, “desperate to acquire the license,” used Unitech as its front in pursuit of a second license.
Unitech was one of the eight companies granted licenses in 2008. But the Supreme Court later ruled all the licenses illegal, in part because government investigations said that the licensing fee paid by the companies was substantially below market rates.
Fourteen people — including India’s former telecom minister and several Unitech officials — have been on trial in a special court on charges of cheating the government by underselling the licenses. A verdict is expected early next year. All have said they are not guilty.
Prashant Bhushan, a lawyer and anti-corruption activist, in 2014 submitted to the Supreme Court the government’s fraud investigation report charging that the Tata Group used Unitech as a front for its telecom application. He urged the court to direct the Central Bureau of Investigation to take up the case.
Mr. Bhushan also charges in the court petition that the Tata Group, in “glaring evidence of an apparent quid pro quo” for a telecom license, transferred property valued at tens of millions of dollars to the family at the helm of the political party of the telecommunications minister at the time.
Mr. Bhushan’s actions are still pending before the court.
A. Raja, the former telecom minister, declined to comment. A spokesman for his political party could not be reached.
The bureau of investigation did not respond to requests for comment. Vivek Priyadarshi, the bureau’s investigating officer in the case at that time, declined to discuss its conclusions.
In India, where corruption is a fact of life, the Tata Group — a powerhouse conglomerate that makes Land Rovers, operates the historic Pierre Hotel in New York and sells the world Tetley tea — has been held up as the exception to the rule.
Its patriarch, Ratan Tata, 78, is a revered figure here, a cross between Warren E. Buffett and Bill Gates whom even schoolchildren know and look up to as Mr. Clean — the billionaire whose family built its name in part on zero tolerance for corruption.
His company symbolizes the role an ascendant India sees for itself on the global stage. In 2010 Mr. Tata arranged a $50 million donation to the Harvard Business School, the school’s largest gift from an international donor, and its dean sits on the board of the empire’s umbrella organization, Tata Sons. Mr. Tata has been knighted by Queen Elizabeth.
Now, however, Mr. Tata is caught up in a nasty public fight for control of the business — with the man he had chosen to succeed him as chairman. The company finds itself defending against serious allegations of wrongdoing.
Some of the claims have been raised by his chosen successor, Cyrus Mistry. Mr. Tata ousted Mr. Mistry in late October, saying it was necessary because “the board of Tata Sons lost confidence in him and in his ability to lead the Tata Group in the future.”
Mr. Mistry, 48, told Tata’s board in a letter that an internal audit indicated that its airline joint venture, AirAsia, had made more than $3 million in “fraudulent transactions” with two companies. In recent days, India’s Directorate of Enforcement has started an investigation into the AirAsia payments. The directorate did not respond to requests for comment.
“Never before has the Tata Group, including the philanthropic objectives of the Tata Trusts, been in jeopardy to this extent and scale,” Mr. Mistry said in a public statement this month. He said he was fighting “to protect the Tata Group from capricious decision-making by the interim chairman,” a reference to Mr. Tata.
Separately, on Friday, a crusading member of India’s Parliament, Subramanian Swamy, called in a court complaint for an investigation into allegations from a government report that Mr. Tata in 2008 used a front company to apply for a telecommunications license, potentially circumventing the limits on the number of licenses one investor could hold. This is alleged to have happened at a time of furious maneuvering among companies trying to win the rights to offer cellphone service in India — a battle that resulted in one of India’s biggest corruption scandals ever.
Ultimately the scandal helped sweep India’s founding political party, the Congress party, from power in an epic defeat.
The New York Times has reviewed government documents showing that India’s Serious Fraud Investigation Office recommended prosecuting Mr. Tata in 2013. For reasons that are not clear, the government did not file a case in court.
Ratan Tata, the patriarch of the Tata Group, in Mumbai in 2009. The conglomerate’s many elements include a leading manufacturer of trucks. CreditKunal Patil/Hindustan Times, via Getty Images
The fraud office documents, which Mr. Swamy filed as part of his court complaint, say that the Tata Group invested $250 million in eight subsidiaries of a real estate firm, Unitech — a sum roughly equivalent to the telecom license application fee. Unitech used that money to apply for a license on Tata’s behalf, the report from the government’s fraud office said.
A Tata spokesman said the company made “a bona fide real estate deal” with Unitech unrelated to telecom licenses, adding that “no evidence was found which could be attributed to any criminality.”
The Tata Group was started in 1868, when the British ruled the Indian subcontinent. The founder, Jamsetji Tata, was a descendant of Persian immigrants, known as Parsis, who form a tiny and vibrant community in Mumbai. He began with a trading business, and over the decades the company grew — building India’s first steel mill, its first hydroelectric power station, its first locally made trains and its first airline.
In 1903, Mr. Tata opened India’s first luxury hotel serving Indians, the Taj Mahal Palace Hotel, which is today considered a national landmark. In 2008 the hotel was one of the targets of the dayslong Mumbai terrorist attack by Pakistani infiltrators that shocked India and the world.
The company today has its hand in almost every business imaginable, from consulting to automobiles. Ratan Tata, the cousin of his predecessor, took over the company in 1991 at the age of 53. He became the group’s fifth chairman. He widened the group’s international presence, acquiring Corus Group, the Anglo-Dutch steel company, in 2007 and the Jaguar and Land Rover brands in 2008.
Mr. Mistry — the first non-Tata family member to lead the nearly 150-year-old company — was elevated in 2012 after a two-year search. However, in India’s tight-knit Parsi community, the ties can be close. Mr. Mistry’s family, which owns a major construction business, was the biggest shareholder in Tata Sons, with 18 percent, and Mr. Mistry had been on the board since 2006. His sister is married to Mr. Tata’s half brother.
According to several people close to Mr. Mistry, the relationship between him and Mr. Tata soured in part because Mr. Mistry had begun reining in some favors that the company had previously extended to Mr. Tata’s personal friends.
In one instance, after Mr. Mistry raised the issue, the Tata board explored starting legal proceedings against C. Sivasankaran, a longtime friend and close business associate of Mr. Tata’s, to try to recover $100 million the company said it was owed from a telecom deal. Mr. Sivasankaran also had been renting a 5,300-square-foot penthouse for $11,000, less than half the market rent, from the company, according to correspondence reviewed by The Times. Mr. Mistry raised his rent to the market rate.
Mr. Sivasankaran, in an interview, said he was indeed a friend of Mr. Tata’s. He said, though, that he had suffered financially from the investment and had no intention of paying back the $100 million he owed.
“I don’t want to pay it because Tata has not managed the company properly,” he said. “Siva is alleging the Tata Group does not have management skills,” Mr. Sivasankaran said, referring to himself in the third person.
He also confirmed that he was ousted from the luxury apartment. Mr. Sivasankaran said he had a long-term contract to stay there, so he could have fought to stay, but decided to go quietly.
Another issue at Tata involved no-bid dredging, shipping and barge contracts granted to companies belonging to another of Mr. Tata’s longtime friends, Mehli Mistry, according to three people who have reviewed company documents. (He and Cyrus Mistry, the ousted Tata executive, are cousins.) Cyrus Mistry allowed the contracts to be put up for bid once they expired, according to the people who have reviewed the documents.Continue reading the main story
Photo
Outside a Tata Motors plant in Pune, India. CreditAtul Loke for The New York Times
A Tata Group spokesman referred questions to Tata Power, the unit that made the contracts. Tata Power did not respond to requests for comment.
Mehli Mistry, through a lawyer, said that the contracts were not the result of his friendship with Mr. Tata, and disputed that they were not fairly valued.
The Cellphone Allegations
From a corporate perspective, the most consequential allegations regarding Mr. Tata and the group are those contained in the 33-page report from the Serious Fraud Investigation Office asserting that Mr. Tata’s group was the real applicant behind a telecom license secured by Unitech, the New Delhi real estate company.
A decade ago, India pried open its notoriously dysfunctional telecom market. In the days before deregulation, it could take a customer years just to get a new phone number. People would hang on to their phone lines like family jewels and hand them down to relatives.
Against that backdrop, investors saw a once-in-a-generation opportunity to build an Indian phone empire. But applicants could seek only one license. And the Tata Group had already applied for a different one.
The report says that Tata, “desperate to acquire the license,” used Unitech as its front in pursuit of a second license.
Unitech was one of the eight companies granted licenses in 2008. But the Supreme Court later ruled all the licenses illegal, in part because government investigations said that the licensing fee paid by the companies was substantially below market rates.
Fourteen people — including India’s former telecom minister and several Unitech officials — have been on trial in a special court on charges of cheating the government by underselling the licenses. A verdict is expected early next year. All have said they are not guilty.
Prashant Bhushan, a lawyer and anti-corruption activist, in 2014 submitted to the Supreme Court the government’s fraud investigation report charging that the Tata Group used Unitech as a front for its telecom application. He urged the court to direct the Central Bureau of Investigation to take up the case.
Mr. Bhushan also charges in the court petition that the Tata Group, in “glaring evidence of an apparent quid pro quo” for a telecom license, transferred property valued at tens of millions of dollars to the family at the helm of the political party of the telecommunications minister at the time.
Mr. Bhushan’s actions are still pending before the court.
A. Raja, the former telecom minister, declined to comment. A spokesman for his political party could not be reached.
The bureau of investigation did not respond to requests for comment. Vivek Priyadarshi, the bureau’s investigating officer in the case at that time, declined to discuss its conclusions.
Photo
Mr. Tata and, sitting behind him, his chosen successor, Cyrus Mistry, at an auto expo in New Delhi in 2012.CreditJasjeet Plaha/Hindustan Times, via Getty Images
India Opens Its Skies
In 2012, India allowed its cash-starved airlines to accept investments from foreign carriers, as long as an Indian partner retained control. Yet another Indian market — jet travel — suddenly looked sexier. Tata and others raced in.
Tata teamed up with AirAsia Berhad, a budget airline from Malaysia, and set up AirAsia India. This happened during Cyrus Mistry’s tenure — but he has distanced himself from the deal. In a letter to the Tata board after his ouster, he said that he opposed the deal, but that Mr. Tata pressured him to proceed, and that Mr. Tata himself negotiated the terms with AirAsia.
“My pushback was hard but futile,” Mr. Mistry said in the letter, which The Times has reviewed.
The allegations of questionable payments to two companies came after whistle-blower complaints prompted AirAsia’s board to order a forensic audit. That audit, delivered by Deloitte India in September and reviewed by The Times, identified the payment of more than $3 million to two such companies. Neither company appears to have offices, the audit found.
Mr. Mistry had shared the audit summary with the Tata Sons board members before the October meeting when he was fired, a person close to Mr. Mistry said.
A spokesman for Tata referred questions to AirAsia, which did not respond.
Friends in Business
At the time of Mr. Mistry’s ouster, he was also confronting an issue with Mr. Tata’s friend, Mr. Sivasankaran, whose company owed the Tata Group more than $100 million.
Mr. Sivasankaran in 2006 had invested in a Tata telecom start-up that also received a big investment from NTT DoCoMo, a Japanese company. In 2014, DoCoMo exercised its right to sell back its shares to Tata. The money Mr. Sivasankaran refuses to pay back represents his portion of that buyback expense, according to correspondence between the two sides.
Mr. Sivasankaran, in an interview, said he had invested in the company purely out of friendship with Mr. Tata. He said neither he nor anyone else had influenced Mr. Tata’s decision to fire Mr. Mistry.
A spokesman for Tata said it was pursuing “all legal options” to recover the money.
Mr. Tata’s friend Mehli Mistry maintained a lengthy financial relationship with the Tata Group. Over the last two decades, his companies were granted contracts for dredging, barging and shipping by Tata Power, often renewing them without a bidding process.
But after Cyrus Mistry took over, Tata Power put Mehli Mistry’s contracts out to bid. Other companies won those contracts, according to two people familiar with the bidding process.
Mehli Mistry was so disappointed at losing the contracts that he sent a message this year to Cyrus Mistry through a family member, people close to the former executive said. A person familiar with the message said that Mehli Mistry told Cyrus Mistry to stop interfering in his contracts or he would take steps to defend himself.
People close to Cyrus Mistry say he thinks his ouster was, in part, Mehli Mistry’s retaliation. In his letter to the board, Cyrus Mistry wrote, “I had to ease out hangers-on.”
Mehli Mistry, his lawyer said, “emphatically denied” sending any message regarding contracts to Cyrus Mistry and played no role in his ouster.
Mr. Tata and, sitting behind him, his chosen successor, Cyrus Mistry, at an auto expo in New Delhi in 2012.CreditJasjeet Plaha/Hindustan Times, via Getty Images
India Opens Its Skies
In 2012, India allowed its cash-starved airlines to accept investments from foreign carriers, as long as an Indian partner retained control. Yet another Indian market — jet travel — suddenly looked sexier. Tata and others raced in.
Tata teamed up with AirAsia Berhad, a budget airline from Malaysia, and set up AirAsia India. This happened during Cyrus Mistry’s tenure — but he has distanced himself from the deal. In a letter to the Tata board after his ouster, he said that he opposed the deal, but that Mr. Tata pressured him to proceed, and that Mr. Tata himself negotiated the terms with AirAsia.
“My pushback was hard but futile,” Mr. Mistry said in the letter, which The Times has reviewed.
The allegations of questionable payments to two companies came after whistle-blower complaints prompted AirAsia’s board to order a forensic audit. That audit, delivered by Deloitte India in September and reviewed by The Times, identified the payment of more than $3 million to two such companies. Neither company appears to have offices, the audit found.
Mr. Mistry had shared the audit summary with the Tata Sons board members before the October meeting when he was fired, a person close to Mr. Mistry said.
A spokesman for Tata referred questions to AirAsia, which did not respond.
Friends in Business
At the time of Mr. Mistry’s ouster, he was also confronting an issue with Mr. Tata’s friend, Mr. Sivasankaran, whose company owed the Tata Group more than $100 million.
Mr. Sivasankaran in 2006 had invested in a Tata telecom start-up that also received a big investment from NTT DoCoMo, a Japanese company. In 2014, DoCoMo exercised its right to sell back its shares to Tata. The money Mr. Sivasankaran refuses to pay back represents his portion of that buyback expense, according to correspondence between the two sides.
Mr. Sivasankaran, in an interview, said he had invested in the company purely out of friendship with Mr. Tata. He said neither he nor anyone else had influenced Mr. Tata’s decision to fire Mr. Mistry.
A spokesman for Tata said it was pursuing “all legal options” to recover the money.
Mr. Tata’s friend Mehli Mistry maintained a lengthy financial relationship with the Tata Group. Over the last two decades, his companies were granted contracts for dredging, barging and shipping by Tata Power, often renewing them without a bidding process.
But after Cyrus Mistry took over, Tata Power put Mehli Mistry’s contracts out to bid. Other companies won those contracts, according to two people familiar with the bidding process.
Mehli Mistry was so disappointed at losing the contracts that he sent a message this year to Cyrus Mistry through a family member, people close to the former executive said. A person familiar with the message said that Mehli Mistry told Cyrus Mistry to stop interfering in his contracts or he would take steps to defend himself.
People close to Cyrus Mistry say he thinks his ouster was, in part, Mehli Mistry’s retaliation. In his letter to the board, Cyrus Mistry wrote, “I had to ease out hangers-on.”
Mehli Mistry, his lawyer said, “emphatically denied” sending any message regarding contracts to Cyrus Mistry and played no role in his ouster.
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