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Orient stays mum

Calcutta, Dec. 20: Orient Express Hotels today erected a wall of silence after the Tatas ignited an uncharacteristic war of words with the Bermuda-based company.

Late on Wednesday, R.K. Krishna Kumar, vice-chairman of Indian Hotels Company Ltd, demanded an apology from Orient Express (briefly reported yesterday) for tarnishing the reputation of a “proud Indian company” while aggressively spurning its overtures for a business alliance.

Asked if Orient Express would issue an apology, company spokesperson Pippa Isbell told The Telegraph, “We have no comment at the present time.” The Tatas have been incensed over Orient Express president and CEO Paul White’s letter of December 10 which Kumar described as “pejorative, inaccurate and libellous”.

Kumar, who has been clearly smarting from the aggressive rebuff, said the Tatas were shocked by the tone and tenor of White’s letter and mortified to see it widely circulated even though it had been marked “strictly confidential”.

“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,” Kumar said in his letter issued late on Wednesday.

“I feel compelled to correct the misinformation that has been circulating in the news media as a result of your letter,” Kumar said and proceeded to rebut the points that White had made while rejecting the offer of talks.

Kumar denied that the Tatas had a hidden agenda and said they had made specific proposals “only to explore the opportunities of working together”.

He said the Tatas had acquired an 11.5 per cent stake in Orient Express only to establish the seriousness of its proposition. “We believed that our actions would be received as more credible …if we came to the table with a significant economic interest.” The Tatas underscored that they had never suggested a merger of Indian Hotels and Orient Express and only wanted to work in areas of competitive advantage.

Kumar tried to disabuse White of the notion that the Tatas were looking to piggyback on Orient Express’s global reputation. Rebutting White’s contention that an association with the Tatas would devalue the Orient Express brand, Kumar said the average room rate of Indian Hotels’ properties in North America was $383 — higher than the $302 clocked by Orient Express properties in the same region.

Kumar disputed White’s contention that the Tatas tended to develop hotel brands under the Taj name unlike Orient Express which believed in creating individual hotel brands. He said the Pierre in New York and Campton Place in San Francisco had not been rebranded. Ritz Carlton in Boston had to be brought under the Taj brand because the deal excluded brand rights.

The Tatas said they were upset over the fact that the Orient Express management had decided to ignore its single-largest shareholder and had also erected its takeover defences by modifying its “poison pill”.

While blasting Orient Express for its poor corporate governance standards, the Tatas claimed that they had received calls and messages from shareholders of Orient Express wanting to sell their stake, but “Taj Hotels has honourably declined their advances.”

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