Cyrus Mistry attempt to besmirch image is unforgivable and malicious: Tata Sons

In an email to the board and trustees, Mistry made a slew of allegations including fraudulent transactions, unethical practices and conflict of interest.

By: ENS Economic Bureau | Mumbai | Updated: October 28, 2016 4:07 pm
Cyrus Mistry, Cyrus Mistry sacked, Cyrus Mistry TATA, Cyrus Mistry lame duck chairman, Ratan tata, tata interim chairman, tata, tata group, business news, companies, India news, Indian express news File photo of Ratan Tata with Cyrus Mistry. PTI Photo

A day after Cyrus Mistry levelled a series of allegations against the Tata Group and predecessor Ratan Tata, Tata Sons hit back at its ousted chairman for making “unsubstantiated claims and malicious allegations, casting aspersions” on the Group and “some respected individuals”, and promising to respond to the charges in an “appropriate manner “.

WATCH VIDEO: Following Cyrus Mistry’s Ouster, Tata Group To Shortlist Candidates For Next Chairman

 

In an email to the board and trustees, Mistry made a slew of allegations including fraudulent transactions, unethical practices and conflict of interest. Flagging what he called “total lack of corporate governance” and claiming he had been reduced to a “lame duck chairman”, he questioned key investment decisions in several group companies during Ratan Tata’s tenure and warned of a potential $18-billion writedown on what he described as “legacy hotspots “.

Responding to Mistry, Tata Sons, in a statement, said “it will be beneath the dignity of Tata Sons to engage in a public spat with regard to the several unfounded allegations appearing in his leaked confidential statement. These allegations are not based on facts or the true state of affairs. It is convenient to put selective information in the public domain to defend one’s point of view.”

“There is a multitude of records to show that the allegations made by Cyrus Mistry are unwarranted and these records will be duly disclosed before appropriate forums, if and when necessary, sufficiently justifying the decision made by responsible boards of directors of Tata Sons and its group companies,” it said.

“As the executive chairman, he was fully empowered to lead the group and its companies. It is unfortunate that it is only on his removal that allegations and misrepresentation of facts are being made about business decisions that the former chairman was party to for over a decade in different capacities. The record, as and when made public, will prove things to the contrary,” Tata Sons said.

Cyrus Mistry has been on the board of Tata Sons since 2006. He was appointed deputy chairman in November 2011, and formally appointed chairman of Tata Sons on December 28, 2012.

“Efforts are now being made to level accusations against individuals and company boards for ignoring corporate governance norms that were supposedly upheld by the former chairman while in office,” Tata Sons said.

Refuting Mistry’s claim that he was a “lame duck chairman”, it said the Tata Sons board gives its chairman complete autonomy to manage opportunities and challenges. “However, the tenure of the former chairman was marked by repeated departures from the culture and ethos of the group,” Tata Sons said. It also said that “it’s unforgivable that Mistry has attempted to besmirch the image” of the group.

The Tata Sons statement revealed the background for the sacking of Mistry. “The directors of the Tata Sons board had repeatedly raised queries and concerns on certain business issues, and trustees of the Tata Trusts were increasingly getting concerned with the growing trust deficit with Mistry, but these were not being addressed. The Tata Sons board, in its collective wisdom, took the decision to replace its chairman in the manner undertaken,” it said.

Ratan Tata is chairman of Tata Trusts which holds 66 per cent stake in Tata Sons while Mistry holds around 18 per cent stake.

“The board of directors of Tata Sons is composed of several eminent personalities from all walks of life. This is not a group of people who one would expect to act without exercising proper judgement in the best interests of the entities they sit on the boards of. It is unfortunate that Mr Mistry had overwhelmingly lost the confidence of the members of the board of directors for a combination of several factors,” Tata Sons said.

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  1. G
    George
    Oct 28, 2016 at 4:16 am
    Ratan Tata's friends. Singhvi,Sibal,Chidambaram, Barkha Dutt, what more do u want? Clear proof of bias, money,empire power. A chairman being removed hurriedly without giving him a chance. Tata will become Tata bye bye. Ratan has brought down the image of Tata. JRD must be squirming in his grave. Shameful
    Reply
    1. K
      Kaliyug
      Oct 27, 2016 at 10:42 pm
      Cyrus should take the moral high ground and stop talking trash about Ratan Tata or the organization, he will gain a lot with silence and introspection.
      Reply
      1. B
        Brig.Sidhu
        Oct 27, 2016 at 8:28 pm
        Cyrus has erred. He was bringing the Jewish financiers and they would have been taken over. Tata is the pride of India and is truly an independent Indian company. Cyrus should now co-operate with Ratan and make Tata group rise further.lt;br/gt;lt;br/gt;The Nano is a great car (I own one) since it was an Indian product and great thus all propaa on it from outside our borders.,
        Reply
        1. R
          Ramadurai
          Oct 27, 2016 at 5:37 pm
          Mr Ratan Tata shohld have handled this issue in a much more dignified manner. It appears Tatas are no better than Samjwadi party.
          Reply
          1. S
            saranraj
            Oct 28, 2016 at 8:59 am
            This is what will happen if you make an immature guy on the hot seat
            Reply
            1. K
              karunakarnarayan
              Oct 28, 2016 at 6:58 am
              Do not know why Mistry was made Chairman in the first place if the old guard was not willing to give up its powers.lt;br/gt;lt;br/gt;The empire strikes back
              Reply
              1. M
                mahendra thacker
                Oct 27, 2016 at 6:28 pm
                Tata = Thugs who have usurped huge property on many fronts in India while doing nothing substantial
                Reply
                1. M
                  media
                  Oct 28, 2016 at 3:24 am
                  Mistry was doing his job --- cleaning the mess left behind his predecessor ratan tata whose true rotten core has finally been unveiled. Mistry's family has 18% stake in the tata companies so naturally he wants them to be profitable. That's why he opposed the airline idea which he was basically arm twisted by tata to agree, airline industry is a loss making deal in India. That's why he tried to get rid of corus the british steel company as soon as he could --- tatas ignored the fact that everywhere in the west with expensive labor steel companies were being driven out of business by cheap Chinese steel yet he bought this hugely expensive company and buried tatas under gigantic debt. All the profit made by TCS the cash cow of tatas was wasted in such ventures. Including Nano which was idealistic but they dived into it without any preparation without any research and development to develop a decent car, not the one which kept exploding and which was more expensive to manufacture than to sell. tata sees himself as a visionary --- but it is like Mungeri Lal ke Hasin Sapne --- just whimsical and foolish. ideas with no legs. Ford were trying to off load their loss making jaguar-land rover business, guess who came to rescue them --- mr. tata. Maybe they have turned around the fortunes of jaguar/land rover but still all this laden Tatas with so much debt that Cyrus Mistry was trying to fix. He didn't get much time to clean the stables after decades of bad decisions. Four years is nothing, tata board should have given him more time. Indian media sucks up to the rich and powerful in India. The truth about the rich and powerful never sees the light of the day if it is damaging to them. I don't know what slavish mentality Indian media and public have that they believe everything that is projected as true. Media is always showing ratan tata as some kind of saint which he most definitely is not.
                  Reply
                  1. A
                    Arjun .
                    Oct 27, 2016 at 6:55 pm
                    When someone is removed from a high profile post like TATA Chairman, their career gets a very negative record, and thus it is always expected that the person being removed will raise issues in public to repair the image... Such public bickering will always happen irrespective of whatever route is adopted to remove a high profile person; because noone can take it lying down as their future career is in jeopardy... So, I think TATA Group must have considered all options before chosing this abrupt route...
                    Reply
                    1. N
                      Niladrinath Mohanty
                      Oct 28, 2016 at 2:50 am
                      Land acquired near Gopalpur for a supposed steel plantin Odisha is one such property.
                      Reply
                      1. P
                        paul
                        Oct 28, 2016 at 4:17 am
                        I don't want to besmirch the image of Tata Sons. But after having lost Rs. 40,000 market value in past 48 hours, someone needs to be held accountable of who started this Tsunami? Well for starters, let us look at the board of Tata sons who "Unanimously voted out Cyrus Mistry". Who are these so called luminaries and why their collective judgement was so disastrous and flawed?lt;br/gt;lt;br/gt;Following is the dream team of Ratan Tata’s Board of Directors. This is a clic case of CRONY CAPITALISM at the highest level.lt;br/gt;1. Ratan Tata, Alumni Harvard Business Schoollt;br/gt;2. Nitin Nohria, Dean Harvard Business School, HBS received a donation of $ 50 Million from Ratan Tata. Nitin gets a board seat at Tata sons.lt;br/gt;3. Ajit Piramal (Inducted in Aug 2016 with sole purpose of outing Cyrus). A buddy of Nitin Nohria , who sits on Piramal Board. In turn Nitin provided help in admission of Ajay’s son Anand to Harvard Business School’s MBA program.lt;br/gt;4. Ishatt Hussain, Alumni Harvard Business School, sits of Bain Co. Boardlt;br/gt;5. Venu Srinivasan (Inducted in Aug 2016 with sole purpose of outing Cyrus). A buddy of Lord Kumar Bhattacharyya from University of Warwick who was hired by Venu as a consultant to help in TVS in 2001.lt;br/gt;6. Amit Chandra (Inducted in Aug 2016 with sole purpose ofmouting Cyrus) of Bain Co. and who has been on the Piramal Board.lt;br/gt;7. Vijay Singh, Retired IAS officerlt;br/gt;8. Ronnen Sen, Ex India’s ambaasador to USAlt;br/gt;9. Farida Khambathalt;br/gt;10. Ralf Speth , inducted on 25 Oct 2016 immediately after Cyrus Mistry was outed to show that board has some professional voicelt;br/gt;11. N Chandrasekaran inducted on 25 Oct 2016 immediately after Cyrus Mistry was outed to show that board has some professional voicelt;br/gt;lt;br/gt;Lord Kumar Bhattacharyya: Ratan Tata’s point person in UK and a buddy of Venu Srinivasan. He is the one who wants to continue the Corus steel operations in UK.lt;br/gt;lt;br/gt;lt;br/gt;Does anyone believe that Cyrus had a free hand when majority of the board is Ratan Tata’s cronies and many of the directors appointment,Cyrus was not even informed leave alone taking his concurrence !! If it was US, some of these directors would meet the same fate as Rajat Gupta.
                        Reply
                        1. S
                          sudhir
                          Oct 28, 2016 at 3:04 am
                          personalities are media creation.RT may fall in the same criterion..let us not forget Radla Tapes.You can get enough parrots to toe your line on news channels.truth maybe some where else,media is enjoying.thanks Cyrus for cracking the myth,
                          Reply
                          1. K
                            Kayess
                            Oct 28, 2016 at 2:36 am
                            A Chairman of a company is not dismissed in such a manner, in fact no employee however low in rank, should be dismissed in this way unless its something like gross misconduct or stealing. Its rather shocking and surprising that Tatasons have to handle it this way, it throws a bad impression and its not right for a Tata Chairman who should have had a neat exit after discussions with him and agreeing on a proper exit process. This has tarnished the Tata image and this can be seen in the fall of the shares. I am not sure whether Tatas can come out of this mess easily and will need a long time for their image to recover. Very sad for the group and all stakeholders.
                            Reply
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