NEW YORK: 20 Dec, 2007 - Tatas have sought an apology from Orient-Express Hotels for its "libellous" remark that sought to show the Indian conglomerate's hospitality business in poor light. 

In a strongly worded letter to OEH's CEO Paul White, Indian Hotels Vice-Chairman R K Krishna Kumar said that "the purpose of this letter is not to pursue a dialogue directly with you but instead to set the record straight on our intentions in approaching your company." 

The Indian Hotels executive added that given Taj Hotels' reputation as one of the world's most trusted brands in hospitality, he felt compelled to correct the misinformation that has been circulating in the news media as a result of the letter written by White. 

White in a letter to Indian Hotels had said that tying up with the "predominantly Indian" hospitality firm will erode the US hospitality chain's brand image. 

"We ask that OEH publish a formal apology to Taj Hotels using the same channels that OEH used to publicise its letter to Taj Hotels, including posting the apology on its global web site," Kumar said. 

"Taj Hotels is a proud Indian company, and it will persevere with its global expansion strategy. Indian companies will continue to play a meaningful role in the ongoing global economic integration... Enterprises and individuals must... adapt to these fundamental economic changes... those with a fossilised frame of mind risk being marginalised." 

Queries sent to White's office remained unanswered and officials at his London office said he had gone on leave and would not return until January 2. White's letter had triggered strong reactions from the Indian industry and government officials, who cautioned against any move to sabotage Indian companies' global expansion plans. 

Kumar's letter, dated December 19 and a copy of which was filed with the market regulator Securities Exchange Commission in the US where OEH is listed, came in response to a letter written by White on December 10, in which he had rejected an alliance proposal from Tatas. 

"Having received and carefully read your letter dated December 10, my initial reaction was one of surprise. I could only infer from the language and tone of the letter, which was highly misinformed and unduly aggressive, that it could not have been written by a senior member of OEH's management team and supported by the company's Board," Kumar said. 

Kumar wrote further, "I thought perhaps it was written on your behalf by an over-zealous adviser and released before it was properly vetted by your office. However, as time passed and your team commented publicly about the letter and its contents, it became clear to me that this letter was indeed written with your full consent." 

"This was extremely distressing to me, as Indian Hotels found the letter to be pejorative, inaccurate and libellous," he noted. 

Kumar said that he had proposed a meeting only to explore the identified opportunities for working together and any "responsible company would have engaged in a conversation with its single largest shareholder, which we are." 

Taj Hotels acquired a 10 per cent stake in OEH in September and subsequently increased it to 11.5 per cent. 

"Taj Hotels invested a considerable amount of time and resources based upon our belief that working together would yield better value for both organisations. We acted in the mistaken belief that your Board recognised its fiduciary duties and would act in a responsible manner to begin a dialogue with us," Kumar said. 

He clarified that Taj Hotels has never suggested a merger and also rebuffed Orient's claims that Taj Hotels was interested in an alliance for improving the performance of its own non-Indian properties. 

A review of publicly available data for respective North American properties shows that OEH's average room rates are meaningfully below those of Taj Hotels properties, Indian Hotels said. 

"It is our firm belief that OEH has an entrenched board and management that does not meet the needs of its shareholder base, nor respect the most basic tenets of corporate governance. As an example Taj Hotels and Dubai Holdings, the two largest public shareholders of OEH, have been unable to enter into any meaningful dialogue with the OEH Board."
 

Ref: PMW\zy          Please reply to:     20 Upper Ground     London SE1 9PF     Tel: 0207 921 4023     Fax: 0207 921 4723          STRICTLY CONFIDENTIAL          Mr R K Krishna Kumar     Vice Chairman     The Indian Hotels Company Limited     The Taj Mahal Palace & Tower     Apollo Bunder     Mumbai 400 001     India     December 10th, 2007          Dear Mr Kumar,          As President and CEO of Orient-Express Hotels Ltd., I wish to     acknowledge your recent filing of Amendment No. 1 to Schedule     130 stating that you and your affiliates are the beneficial     owners of 11.5% of Orient-Express' Class A Common Shares.          As you are fully aware, we have previously advised you that     Orient-Express has no interest in pursuing the proposals     described in your letter of November 14, 2007. We felt that     our prior correspondence with you was sufficiently clear in     communicating our position on this matter, but because you     have again expressed an interest in a transaction with Orient Express,     we feel it is appropriate to outline some of the     reasons why we do not wish to pursue your proposals.          We do not believe that there is a strategic fit between your     predominantly domestic Indian hotel chain and our global     portfolio of luxury hotels and unique travel experiences, and     we do not wish to be involved in an attempt to improve the     performance of your non-Indian properties. We believe any     association of our luxury brands and properties with your     brands and properties would result in a reduction in the value     of our brands and of our business and would likely lead to     erosion in the RevPar premiums currently achieved by our     properties.          Further, your approach to branding, whereby longstanding     individual hotel brands are replaced with the "Taj" brand is     contrary to our approach, whereby we develop and enhance     individual hotel brands and ultimately extend these hotel     brands to additional properties. Accordingly, it remains the     opinion of our Board of Directors that your proposal is     inconsistent with our business strategy and is not in the best     long-term interests of Orient-Express and its shareholders.          Paul M White     President & CEO     Orient-Express Hotels, Trains & Cruises          Cc J B Hurlock     Chairman     Orient-Express Hotels

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