Stakeholders bewildered at developments at Tata group: Advisory firm

IiAS said absence of clear communication has prompted excessive speculation.

By: PTI | New Delhi | Published:October 28, 2016 8:14 pm
Cyrus Pallonji mistry, Cyrus mistry, Tata, Tata sons, Tata group, Cyrus Mistry Tata, Cyrus mistry sacked, Ratan tata Ratan Tata with Cyrus Mistry. PTI Photo

Tata group should be more forthcoming as the abruptness of developments there has left stakeholders bewildered, proxy advisory firm IiAS said on Friday against the backdrop of Cyrus Mistry’s removal as the conglomerate’s Chairman. After his unceremonious ouster as Chairman of the over USD 100 billion conglomerate, Mistry made a scathing attack on the group and Ratan Tata in a letter written to the board of Tata Sons, which has hit back and refuted the allegations.

Noting that unlisted Tata Sons sits at the apex of the largest business group in India, IiAS said absence of clear
communication has prompted excessive speculation. “The abruptness of developments at the Tata group has left stakeholders bewildered,” IiAS said in its report titled ‘Turbulence at Tata Sons: What stakeholders are asking’.

ALSO READ: Tata-Mistry spat ‘internal matter’, we’re keeping a watch: Government

According to the report, the discussion and scrutiny is happening along three arcs — the legality of the process, the the decision itself, and what happens now that Mistry has been ousted. Tata Sons is the main holding company of the group.

The proxy advisory firm emphasised that even though Tata Sons is an unlisted entity and therefore accountable to a
limited set of stakeholders, its actions affect the entire Tata group of companies as well as in a “sense the whole of corporate India”. The report said Tata group must recognise its engagement rules have now changed in making an almost cursory statement that the Chairperson of Tata Sons has been ‘replaced’ and a generic response to Mistry’s email leak, the group is taking an extremely narrow and legal view of Tata Sons.

“But, developments including the leaked Cyrus Mistry letter, may have put events beyond their control. How the
group flies through this turbulence, will determine the way the group is perceived and its terms of engagement with its stakeholders,” IiAS said. Further, the proxy advisory firm said that in the absence of hard facts to substantiate their action, “the group risks losing public trust”.

“The Tata group, given its stature and its century-old presence, is responsible and accountable to a much wider set
of stakeholders. It is time that the Tata group takes cognisance of this and begins to proactively communicate,” it added. IiAS has made a disclosure that Tata group through Tata Investment Corporation Ltd holds equity in the proxy advisory firm while noting that the report is based entirely on publicly available information.

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  1. P
    paul
    Oct 28, 2016 at 5:04 pm
    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 got a board seat at Tata sons.lt;br/gt;3. Ajay Piramal (Inducted in Aug 2016). 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. Ishaat Hussain, Alumni Harvard Business School, sits on Bain Co. Boardlt;br/gt;5. Venu Srinivasan (Inducted in Aug 2016). 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) 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 ambador 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 independent voicelt;br/gt;11. N Chandrasekaran inducted on 25 Oct 2016 immediately after Cyrus Mistry was outed to show that board has some independent voicelt;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 despite its’ humongous losses.lt;br/gt;Does anyone believe that Cyrus had a free hand when majority of the board is Ratan Tata’s cronies. If this was in US, some of these directors would have met the same fate as Rajat Gupta.
    Reply
    1. P
      paul
      Oct 28, 2016 at 5:00 pm
      Why doesn't Tata Board has the courage to call a Press conference and clear the air by answering following questions:lt;br/gt;lt;br/gt;1. What actions of Cyrus Mistry caused them to believe that Cyrus had lost their confidence ( The fact is three of the six board members - Ajay Piramal, Amit Chandra and Venu Srinivasan) who voted for Cyrus's removal were hardly on the board for LESS THAN TWO MONTHS !! (They were appointed to the board by Ratan Tata in Aug 2016)lt;br/gt;lt;br/gt;2. Why a charge sheet was not given to Cyrus explaining which of his actions were harming Tata Group's interest?lt;br/gt;lt;br/gt;3.Why investment community was kept in dark?lt;br/gt;lt;br/gt;Unless the above questions are answered , Ratan Tata and his cronies could go around the world, but no sovereign fund , be it Temasek Holdings of Singapore, Norwegian Sovereign Fund of Norway or CALPERS of California would want to get involved with Tata, which has displa gross negligence of corporate governance.lt;br/gt;lt;br/gt;Ratan Tata seems to have become Donald Trump of India. First rock the boat and then claim that he alone can stabilize the boat.lt;br/gt;Tata Group in general and Ratan Tata in particular have become a poster child of intrigue and back door scheming having an egomaniac Chairman whose only pion seems to be holding on to power at any cost.
      Reply