Tata Sons on Thursday dismissed all allegations of interference in the functioning of Cyrus Mistry as the Chairman.
In a nine-page note, Tata Sons said that the accusation of interference by the Trusts is not only wrong in reality but has been twisted to mislead people. “One of the important duties and obligations of the Trusts and the Trustees is to protect the assets of the Trusts, the most important and valuable being investments in Tata Sons donated by the founders and their successors many decades ago and which is a major source of income of the Trusts. It is only to fulfil this duty that information relating to the operations of Tata Sons which is an unlisted investment holding company need to be kept track of,” Tata Sons said.
Mistry had earlier alleged that he was a ‘lame duck’ Chairman as Tata Trust and Ratan Tata did not allow him to function freely.
Tata Sons also questioned Mistry’s intent by not quitting as the Chairman of Tata group companies. “It was fair expectation of Tata Sons that Mistry would gracefully resign from the boards of other Tata companies on being replaced from the position of the Chairman of Tata Sons. This expectation was in line with convention, past practice as well as the Tata governance guidelines that were approved and adopted by Tata Sons under the aegis of Mistry. However, his departure from these requirements and conduct since his replacement as Chairman of Tata Sons demonstrates his disregard of long-standing Tata traditions, values and ethos,” it said.
Tata Sons said that the developments in the Indian Hotels Co Ltd (IHCL) “reveals the true colours of Mistry and his ulterior objective. Having been replaced as the Chairman of Tata Sons, where the majority of the Board and the major shareholders had expressed lack of confidence, Mistry is trying to gain control of IHCL with the support of the Independent Directors of the Board,” Tata Sons said.
“In hindsight, the trust reposed by Tata Sons in Mistry by appointing him as the Chairman four years ago has been betrayed by his desire to seek to control main operating companies of the Tata group to the exclusion of Tata Sons and other Tata representatives. Indeed, this strategy of being the only Tata Sons’ representative on the Boards of the operating Tata companies, seems to have been a clever strategy planned and systematically achieved over the last four years,” Tata Sons said.
Countering Mistry’s allegations of Tata companies having to take ‘potential write-downs of $18billion’ Tata Sons said, “Has Mistry, the Chairman, informed the Boards of these companies at any time in the past specifically of the above mentioned potential write-downs? If so, when was this done and why was it not made public”.