Mistry a disruptive influence: Tata

After a barrage of criticism over the last six weeks from ousted Tata Sons chairman Cyrus Mistry, interim Chairman Ratan Tata broke his silence on Wednesday, asking shareholders of group companies to support the former’s removal as a Director on their Boards.

In a letter to shareholders of six group companies, which are scheduled to have Extraordinary General Meetings this month, Tata said that Mistry’s continued presence as a Director was a “serious disruptive influence” that could make the companies “dysfunctional” due to his open hostility to primary promoter Tata Sons.

Tata said Mistry was replaced as Chairman of Tata Sons on October 24 because the Board had “lost confidence in him and in his ability to lead the Tata Group in the future.”

This is the first time Tata has expressed his views on the issue since the controversy broke out in October.

On the the other hand, Mistry has made several direct attacks on the interim Chairman, accusing him of interference, violating corporate governance norms and running the Tata group as a fiefdom, among other things.

The Tata group companies have called for EGMs, starting with Tata Consultancy Services (TCS) on December 13, to seek the ouster of Mistry. This is the first time Ratan Tata has decided to seek shareholder support on any issue at an EGM.

Explaining why Mistry was removed as Chairman of Tata Sons, Tata said the board had taken the step after the relationship with Mistry deteriorated and attempts to “remediate went unheeded.”

In the letter, Tata stated that some of the group’s investments were “hugely successful”, while others have taken time to be profitable.

Responding to Mistry’s allegations on investment decisions, Ratan Tata said Tata Sons constantly evaluates business opportunities and invests in creating enterprises. He said the approach is to “support and fund these businesses during their development and growth phases”.

Mistry’s office said Ratan Tata was lying. “His claim that Mr. Mistry’s treatment at the Tata Sons Board on that day (of dismissal) was well-deliberated and was preceded by various attempts to discuss with Mr. Mistry is a lie,” it said.

It added that five minutes before the Board Meeting scheduled on October 24, Nitin Nohria (director) and Ratan Tata went to Mistry’s room and informed him that on that very morning, the trustees had taken a decision to replace Mistry.

“The fait accompli presented to Mr Mistry was that he could leave or face a sacking at the Board Meeting scheduled in the next 5 minutes. Neither was there any deliberation nor was there any prior attempt at remediation as Mr Ratan Tata now seeks to make out.” said Mistry’s office.