Tata Power says Singapore shares pledged with banks, safe from immediate seizure

Mumbai: Shares of Tata Power Company Ltd’s two Singapore-based subsidiaries are pledged with banks and unlikely to be seized immediately, the company said on Wednesday, moving to reassure investors following a Singapore High Court order directing their seizure to recover an arbitration award.

To sell the shares, the awardee—British Virgin Islands-based Kleros Capital—will first have to deal with the banks and appoint valuers, Tata Power managing director Praveer Sinha said on Wednesday evening, adding that the process could take 3-6 months.

Meanwhile, the company’s appeal against the Singapore International Commercial Court (SICC) order will be heard in the country’s Court of Appeal on 19 January, well before the share-sale process can play out, Sinha said.

“We strongly believe that we have a good case,” Sinha said while speaking to the media during an earnings call, adding that the company does not expect any impact in the immediate future. He said the company doesn’t feel the need to make any provisions towards the potential liability of over $650 million in the interim.

Tata Power’s appeal in Singapore’s highest court is based on an alleged conflict of interest involving two of the three arbitrators, Sinha said. The company raised similar grounds in the SICC, alleging that Stuart Isaacs KC, an arbitrator nominated by Kleros, and John Weiss, the fund’s expert witness, failed to disclose prior contact with Kleros. According to Tata Power, both men traveled to Russia in 2017 and 2018 on trips arranged by a Kleros director.

The SICC rejected these allegations. When contacted by Mint, Isaacs, a London-based barrister, and Kleros denied the claims, calling them “demonstrably untrue.”

Meanwhile, Kleros Capital issued a statement on Wednesday clarifying that Tata Power’s appeal in Singapore’s highest court does not stay the lower court’s enforcement order. The fund added that the unpaid award continues to accrue about $71,600 in interest each day.

The matter pertains to Tata Power’s lost arbitration with Kleros Capital in the Singapore International Arbitration Centre (SIAC), which found the Mumbai company guilty of violating non-disclosure agreements.

The two parties had planned to jointly develop a coal mine in Russia’s remote Kamchatka region based on Kleros’s intelligence. However, the plans later fell through over commercial disagreements and Tata Power went on to win the license to mine the coal deposits on its own. While the company later abandoned the project, Kleros objected to it using confidential information received under a non-disclosure agreement.

The three-member SIAC tribunal ordered Tata Power to pay Kleros compensation of $490 million, litigation costs, and interest, which added up to over $650 million.

Tata Power appealed this decision in the SICC, which ruled against the company on 26 August and directed the Singapore sheriff to attach and sell its shares in Bhira Investments Pte. Ltd. and Tata Power International Pte. Ltd to recover the dues.

The company also filed a police complaint against Kleros, Isaacs, Weiss, and two of its former employees in Mumbai on 2 November, alleging corporate espionage. The company feels that the matter needs further investigation, Sinha said on Wednesday.

Kleros Capital has denied the allegations made in the police complaint. “Kleros has not been served with any complaint or proceedings and has no knowledge of the allegations beyond what has been reported,” it said in a statement.

“As reported, many of the allegations are very similar or the same as the demonstrably false and ridiculous allegations that were previously circulated in a coordinated disinformation campaign regarding the SIAC Arbitration,” it added. “Those allegations were false then and remain so now.”

Tata Power on Wednesday reported a consolidated profit of ₹1,652 crore for the July-September quarter, aided by high power demand and surged prices in the spot electricity market. The profit was a third more than the same period last year. Revenue grew by 25% year on year to ₹19,886 crore, while Ebitda expanded 5% to ₹4,245 crore.

The company on Wednesday appointed Sanjay Banga, its president for renewable energy, as additional director and chief executive officer-designate. Banga will take over the reins of the company from incumbent Praveer Sinha from 1 May 2027 for a period of five years.

Nehal chronicles India’s top conglomerates for Mint. From navigating the complexities of big-bang mergers and large-scale fundraises to decoding high-profile recruitments and seemingly inexplicable corporate pivots, Nehal focuses on unpacking the long-term strategies of the country’s most influential business houses. He aims to provide readers with a clear-eyed view of how these corporate titans shape the broader Indian economy.<br><br>His professional journey began at The Economic Times in 2018, where he spent over five years before joining Mint in 2023. Over his career, he has tracked diverse sectors like automobiles, metals, cement, power, infrastructure, and renewable energy. He also keeps a close watch on the intricacies of corporate finance and corporate governance. This wide-ranging sectoral experience allows him to better understand India’s large conglomerates that sit at the confluence of these vital industries.<br><br>Nehal studied mechanical engineering from the Pune University and graduated with distinction in 2017. Driven by a passion for storytelling, he pivoted to journalism immediately after, attending the Asian College of Journalism in Chennai. While his time in the newsroom has made him a healthy sceptic, his engineering roots keep him perpetually inquisitive about how things work—and why they fail.<br><br>He actively encourages readers to reach out for feedback, collaboration, or news tips. Nehal can be reached via LinkedIn or directly at nehal.chaliawala@livemint.com.

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