Recently, a few days back, Ratan Tata returned from a retirement period of four years to claim back the throne of Tata Sons. The former chairperson, Cyrus Mistry was sacked because the Tatas weren’t very happy with his style of working. However, this ensued one of the bitterest corporate mudslinging ever as both parties raised allegations against each other.
Ratan Tata wrote to the employees of the Tata Group on October 25th claiming his return was in the “interest of the stability of and reassurance to the Tata Group.” According to rumours, the Shapoorji Pallonji group, run by Cyrus Mistry’s family, is planning to take legal action against the board. The group refutes all such claims. Pallonji Mistry, the head of the group, owns an 18% stake in Tata Sons, making him the single largest individual shareholder in the Tata Group.
Three days after the sacking Mistry in a series of leaked e-mails claimed that he couldn’t believe that he was sacked on the ground of non-performance as he believes it was due to Ratan Tata’s interference, he was pushed to become a lame-duck chairperson. He also brought to light the five unprofitable companies Ratan Tata had purchased during his tenure. Mistry also pointed fingers at the Nano (smallest and cheapest car) which since its inception made losses. He also claimed that Ratan Tata’s investments in the aviation and hospitality sector were questionable.
The leaked e-mails from Mistry’s side were considered unforgivable by the Tata group.
“It is unfortunate that Mr. Mistry had overwhelmingly lost the confidence of the members of the board of directors. The directors… 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. 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.” – Tata Group in an official statement
Related Post: Flipkart CFO Sanjay Baweja quits the company