The ouster of Cyrus Mistry as Chairman of Tata Sons at a board meet on October 24 caught everyone, including Mistry himself, by surprise. Two weeks after that fateful day, Mistry, according to those close to him, has thought through the circumstances that led to his sacking and classified them under three “buckets”.
The relationship between Mistry on the one side, and Tata and the Trusts on the other, turned difficult in the last 18 months or so when Mistry began to take uncomfortable decisions on the legacy issues facing the group. According to the source, Mistry was beginning to push back with Tata on some issues, which the latter may have seen as “hitting back” and not liked.
One of the examples cited was the sale of Taj Hotels’ Boston property in July for $125 million. Ratan Tata, it is understood, was upset over the sale. According to the source, he objected to the sale, and yet Mistry went ahead with it to cut losses. But Mistry ensured that the Taj brand would stay alive by signing a contract with the buyer to manage the hotel. In an earlier board meeting, Mistry had circulated a note on corporate governance seeking to clearly define the role of the Trusts, of Tata Sons, operating companies and the role of the Chairman of the two entities. This might have been seen by the Trusts as an attempt to clip their wings, says the source. Mistry was of the view that leadership of the Trusts and Tata Sons should be vested in different persons in the interests of checks and balances.
The second “bucket” was the inability of Tata to let go of control. If the source is to be believed, Tata, in his capacity as chairman of the Trusts, would suggest alterations to minutes of board meetings of Tata Sons through the nominee directors of the Trusts.
In the last and most interesting “bucket” is the role played by those who had vested interests in the status quo that Mistry was trying to change. In this context, the source mentioned as an example the proximity that C Sivasankaran, formerly of Sterling Computers and Aircel, enjoyed with Tata, and the associated privileges.