Full Text: Tata Sons’ response to Cyrus Mistry

In a statement, Tata Sons said that it is unfortunate that Mistry is making all the allegations and misrepresenting facts about business decisions which he was party to for over a decade in different capacities.

By: Express Web Desk | New Delhi | Updated: October 28, 2016 4:03 pm
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The Cyrus Mistry-Tata row turned ugly on Thursday with Tata Sons rubbishing the allegations of its sacked chairman as malicious. In a statement, Tata Sons said that it is unfortunate that Mistry is making all the allegations and misrepresenting facts about business decisions which he was party to for over a decade in different capacities. The company said response to Mistry’s allegations will be given in an appropriate manner.

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

 

Mistry, in a confidential mail to the board members of Tata Sons, had expressed shock over his sudden removal as the chairman of the company and alleged fraud by Tata in Air Aisa venture beside claiming that the Nano project was incurring huge loss to the company and and was being continued only due to emotional reasons.  He had maintained that he was pushed as a ‘lame duck chairman’.

Tata Sons also reiterateed that reports of the exit of Rakesh Sarna, Managing Director and CEO of Taj Hotels Resorts and Palaces, are completely baseless and unfounded.

The statement from Tata Sons

It is a matter of deep regret that a communication marked confidential to Tata Sons board members has been made public in an unseemly and undignified manner. The correspondence makes unsubstantiated claims and malicious allegations, casting aspersions on the Tata group, the Tata Sons board and several Tata companies and some respected individuals. These will be responded to in an appropriate manner.

Mr. Cyrus Mistry, the former Chairman of Tata Sons, has been on the Board of the Company since 2006. He was appointed Deputy Chairman in November, 2011, and formally appointed Chairman of Tata Sons on December 28, 2012. He would be fully familiar with the culture, ethos, governance structure, financial and operational imperatives of the Tata Group as well as various group companies. 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.

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. 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.

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. 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 Mr. 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.

The strength of the Group is not just confined to its value system and ethics in the Board room but to a very large extent by the adherence to the values by its 600,000 plus employees whose spirit and cooperation has built the Group to where it is today. It is unforgivable that Mr. Mistry has attempted to besmirch the image of the Group in the eyes of the employees.

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 Mr. 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.

The Interim Chairman in his first interaction with senior leaders has stressed to them the need to continue on focusing on building great businesses while emphasising on delivering strong shareholder returns. Board members of Tata Sons have in the past stressed on the need to be more decisively focused on bringing down debt, sharpening focus on both the portfolio and capital efficiency.

The Tata Group is proud of its rich legacy of contributing to the growth of the nation. During a long history, it has faced many challenges and the employees of this group have worked hard to create great companies, and deliver shareholder value. The Tata way is to not run away from problems, or constantly complain about them, but firmly deal with them and build a better tomorrow.

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    ashok s
    Oct 27, 2016 at 1:07 pm
    When parsis poured sugar in king of Gujarat milk gl pleasuring him to drink sweet milk. Poor king didn't knewed that he will get diabetic. Allegations of Cyrus cannot be ignored and it will be extreme wrong decision to ask both parties to settle on their own. As lot of hidden things are their to explore. Request to authorities to check and come out with truth
    Reply
    1. C
      c
      Oct 27, 2016 at 2:44 pm
      C p Chandra das from Memphis, USAlt;br/gt;lt;br/gt;The Tatas have become a synonym for High Profeesionalism. Legends from Jamshedji Tata onwards have built up the organization and expanded the same on the principle of BUSINESS IS PEOPLE and the w nation is well aware of the same. When there was fire in the Taj hotels at Mumbai, the then chairman Ratan Tata dealt with the problem as a HUMANIST and that is the history of Tatas. The nation expects the Tatas to continue in the same style in future as well
      Reply
      1. F
        Franky
        Oct 27, 2016 at 1:14 pm
        Greed or Humiliation suffered on this planet can make a person to go down to any level as he does not care as the mind gets clogged by bad blood.
        Reply
        1. G
          G k
          Oct 27, 2016 at 12:31 pm
          We must not forget CM has 18℅ shares in Tata . So why he will act in a manner determintal to his own co. The statement by RT is just a lot of words of condemnation rather puttinng things in humility unlike his public artificial image.
          Reply
          1. M
            Mayur Panghaal
            Oct 27, 2016 at 11:48 am
            How many know that Tata is controlled by a "Charitable trust'' ?lt;br/gt;Charitable trusts,by their very consution cannot do any activity to earn a profit.They also are exempt from all taxes.lt;br/gt;The CAG caught Tata indulging in tax evasion via this charitable trust...and fined it 2000 crores.lt;br/gt;What happened to that case is unknown.lt;br/gt;What cyrus mistry has revealed is just the tip of the iceberg.
            Reply
            1. M
              Mayur Panghaal
              Oct 27, 2016 at 11:50 am
              Which company earned max via 2g scam ??lt;br/gt;It was tata.
              Reply
              1. M
                Mayur Panghaal
                Oct 27, 2016 at 11:50 am
                Why am I not surprised ???lt;br/gt;Tata and Reliance were both clients of Nira Radia.lt;br/gt;Radia was key in moving Tata to Guj where Modi handed out all sorts of sops worth thousands of crores to it.lt;br/gt;Did Tata pay him something under the table in return ???lt;br/gt;Time will tell.
                Reply
                1. V
                  v b
                  Oct 27, 2016 at 1:48 pm
                  It is only when there is a public spat between topmost functionaries in a company that missteps, lapses failures come to light openly.This happened in the case of the Reliance group when the dispute broke out in the public domain between Mukesh Ambani and Anil Ambani. The public was not aware that losses were being incurred in huge amounts without any remedial action or closure in cases like Nano Car, Tata Steel, Tata Chemicals, Tata’s Hotels (particularly those abroad) etc. SBI and ICICI seem to be among the Banks providing finance to the Tata Group. It is surprising that these Banks are not known to have applied pressure to take remedial action or close down the said loss-making operations. It is true that in business not all decisions turn out to be correct or profit-yielding. But losses incurred in some operations may not matter so long as other operations yield profit over-shadowing and surping such losses.
                  Reply
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