Tata Group on Wednesday accused the management of a US-listed luxury hotel group of a "fossilised frame of mind" for suggesting the Indian group's hotel chain would be an unsuitable strategic partner, and has demanded a public apology.
India's business community and media took umbrage at a letter last week from Orient-Express Hotels rejecting a tie-up with Tata's Taj Hotels on the grounds it would reduce its brand values and room yields.
Business leaders accused OEH of arrogance towards one of India's most respected companies and newspaper editorials levelled allegations of racism towards the group, in which Indian Hotels Company, part of the Tata Group and Taj's parent company, has an 11.5 per cent stake.
Tata owns the Anglo-Dutch steelmaker Corus and is one of the main bidders for Jaguar and Land Rover, the luxury car companies.
Taj has now waded into the dispute, writing to Paul White, chief executive of OEH, to claim the letter was "pejorative" and "inaccurate" and to complain of its "unduly aggressive" tone.
RK Krishna Kumar, vice-president of IHC, went on to accuse the OEH board and management of not respecting "the most basic tenets of corporate governance".
He accused OEH of seeking to escalate the issue by making his letter public through a filing to the Securities and Exchange Commission. He deplored the way the letter had been made public through an SEC filing.
Alluding to the wider ramifications of the row, Mr Krishna Kumar said Indian companies would play a meaningful role in the global economic integration. "We believe that those with a fossilised frame of mind risk being marginalised," he said.
OEH last week said its letter was not intended to be racist, but was based solely on business rationale.
Copyright The Financial Times Limited 2007.
