Tata Sons Hits Back, Mistry’s Mail Leak Unpardonable

A day after Cyrus Mistry’s devastating letter which accused Ratan Tata of clipping his role as chairman, Tata Sons expressed deep regret that the letter which was marked confidential to the board members was in an unseemly and undignified manner made public. Tata Sons stated that the letter made unsupported claims and vindictive allegations, casting derogation on the Tata group, the Tata Sons board and other Tata companies and also some dignified individuals. These would be answered in an appropriate manner.

Tata Sons hits Back, Here is what they Said:

Cyrus Mistry was fully familiar with the culture, ethos, financial and operational imperatives, governance structure of the Tata Group as well as other Tata companies. As the Executive Chairman, he had complete authority to lead the Tata group and its companies. It was unfortunate that it was only on his removal that allegations and falsification of facts were being made about business decisions that Mr. Mistry was party to for over 10 years.

Efforts were being made to level accusations against individuals and company boards for ignoring norms of corporate governance which were supposedly upheld by former Chairman while in office. The Tata Sons board provides its Chairman with complete authority to manage opportunities and face challenges. However, the tenure of Cyrus Mistry was marked by repeated departures from the ethos and culture of the Tata group. It was unfortunate that Mr. Mistry had overwhelmingly lost the confidence of the well-read and wise members of the Board of Directors for a combination of numerous factors.

The Directors of Tata Sons board had repeatedly raised questions and concerns on certain business matters, and Trustees of the Tata Trusts were getting concerned increasingly with the growing trust deficit with Cyrus Mistry, however these weren’t being addressed. In its collective wisdom, the Tata Sons board took the decision to replace Cyrus Mistry, its Chairman in the manner undertaken.

It was ‘unforgivable’ that Mr. Mistry had attempted to defame the Tata Group in the eyes of the employees. It was beneath the dignity of Tata Sons to be a part of a public spat with regard to the numerous unfounded allegations appearing in Mr. Mistry’s leaked confidential statement. These allegations were baseless and devoid of facts.

There was a multitude of records to prove that the allegations made by Mr. Cyrus Mistry were unwarranted and these records would be duly disclosed before appropriate forums, if and when required.

The Interim Chairman in his first interaction with the senior leaders had stressed to them the need to continue on concentrating on building great businesses. The Tata Group was proud of its rich legacy of contributing to India’s growth. During a long history, it had faced many challenges and the employees of Tata group had worked hard to create great companies, and also deliver shareholder value. The Tata way wasn’t to run away from problems, or constantly crib about them, but it was to firmly deal with them and build a better tomorrow, a better future.

• And that was the end of Tata Sons’ reply to Cyrus Mistry’s letter.

Tata Sons hits back, Burden of proof is on Cyrus Mistry to back the Charges:

Cyrus Mistry’s best bet would be to go via his father’s company, Shapoorji Pallonji, a principal shareholder in the Tata Sons, and file a petition for both oppression and mismanagement under the Sections ‘397’ and ‘398’ of the Companies Act, 1956.

The Tata Group, on the other hand, also seem to have enough evidence. But, Mistry’s claims put up a strong defence wall in front of the NCLT – National Company Law Tribunal.

Tata’s strategy predicates on succeeding to show that Cyrus Mistry’s removal was in the best interest of the multinational and its shareholders.

Ratan Tata Wants Buyer for Cyrus Mistry’s Stake in Tata Sons:

Ratan Tata is seeking a partner that could buy out the Tata Sons stake held by the family of Cyrus Mistry, sources said. The Tata family trusts have approached sovereign wealth funds and long-term investors to measure their interest in purchasing the Mistry family’s stake if it became available. The trusts held preliminary talks with the potential buyers of the about 18 per cent Tata Sons stake as they prepared for a number of possible scenarios. Mistry’s family doesn’t presently plan to sell its holdings, sources said.

Related Articles:

• Mistry effect: Tata lose 55,000 cr in market cap in 3 days
• Cyrus Mistry: Tatas staring at $18 billion in writedowns

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