Cyrus Mistry fights back; reaches out to Tata shareholders, directors & the govt
The battle between former Tata Sons chairman Cyrus Mistry and Ratan Tata is far from being over.
After being unceremoniously ousted, Mistry has grabbed every opportunity and forum to vent and to also to garner support form the directors of Tata Companies and shareholders.
In an emotional appeal to the shareholders of all the Tata Group companies, Mistry has pleaded for their support in forthcoming special general body meetings where Ratan Tata is most likely to move a proposal to remove the former as chairman of other group companies.
A resolution to this effect will be tabled in the annual general meetings of the group companies to be held in the near future.
Mistry has reportedly also reached out to the government to intervene and save the Tata Group as he believes the group will collapse without its intervention.
Rigid lines and blunders
According to the sources close to Mistry, he was removed as chairman of Tata Sons because he wanted to discipline the group and bring in good governance.
"However, the old turks in the group were rigid and adamant. They resisted the change which would have forced them to match the pace of the new generation. That is the reason they provoked others against Mistry. We have appealed to the shareholders to listen to their conscious and vote during the special general body meetings," sources said.
Close aides of Mistry have alleged that the decision to acquire Corus Steel was the biggest blunder. The Europe operations of Tata Steel have been jeopardised due to huge operation cost.
"The company has close to 10,000 employees and has to pay pension to a whooping 1.25 lakh retired employees of Corus. This has put Tata Steel Europe in huge losses. Mistry wanted to negotiate with the British government to revise policies to turn around the company. The company is facing losses to the tune of several crores every year," sources said.
Mistry's close aides have claimed that all the pet projects of the group such as Tata Nano, Air Asia, Indian Hotels and Tata Steel Europe are in huge losses.
"The group acquired some hotels in the US and even that venture is running into huge losses. The pet project of the group, Tata Nano is making annual losses around Rs 1000 crore. The future of Nano shall be further jeopardised once the new safety norms for automobile are brought in. If that happens, there would be no other option but to discontinue production of Tata Nano. Personal ambitions are to be fulfilled by own money. Shareholders' money is not to be wasted on such whims and fancies," sources said.
Mistry has the same opinion about Europe and US operations of the Tata Group. Sources say that he had even appealed to Prime Minister Narendra Modi and finance minister Arun Jaitley to intervene. He predicts that if the whimsical management of the Tata Group continues unchecked, the entire group will be doomed in no time, sources said. Mistry, in an open letter to the shareholders of the Tata Group, published on his website cyrusforgovernance had said that Tata Trust must take care of its assets, which is the shares in Tata Sons.
"It was unethical to entrust an individual and create authority to run the group. This is betrayal of shareholders," Mistry said in the letter. He termed his removal from the post of chairman of Tata Sons illegal. Mistry also alleged that the condition of age limit was also relaxed to appoint Ratan Tata as chairman of Tata Sons again.
His close aides say he may challenge this in the court of law.
Edited by Aleesha Matharu