Cyrus Mistry

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

In a recent development in the corporate world, Cyrus Mistry who was selected to be the succeed Ratan Tata as the chairperson of the Tata group was sacked yesterday. Ratan Tata came out of retirement to rest control over the reins of the Tata group once again. It is estimated that this could cause a feud between the two affluent Parsi groups based in Mumbai as the Mistrys own approximately one fifth of the Tata shares.

He was apparently sacked because Tata group wasn’t very happy with the way Mistry was working as he was cutting down on Tata’s non-profitable but philanthropic projects whilst concentrating on the cash cows only. The two releases by Tata Motors Zica and Bolt have both failed. Fears have also mounted at the UK facilities, which produce the Jaguar and Land Rover, over job losses following Brexit.

“The company’s board and the principal shareholders in its collective wisdom took this decision, which they thought may be appropriate in the long term interest of Tata Sons and the Tata Group.” -Tata Group spokesperson

Tata Sons needs to look for a new and permanent replacement to Mistry within four months. Mistry continues to carry on his duty as the Tata Sons director. Ratan Tata has also written to the Prime Minister informing him about this change and is scheduled to meet the CEOs on Tuesday.

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Corporate mudslinging: Cyrus Mistry v/s Tata Sons

Ratan Tata replaces Cyrus Mistry as the chairperson of Tata Sons