Mistry is a disruptive influence, says Tata
MUMBAI: Tata Group patriarch and interim chairman Ratan Tata on Wednesday sought shareholders’ support in forthcoming extraordinary general meetings (EGMs), Which have been called to remove former chairman Cyrus Mistry from group positions.
This is the first time that Tata has reached out to shareholders after the decision by the Tata Sons board on October 24 to remove Mistry as chairman. He had subsequently interacted with senior management of the group to apprise them of the reasons behind the removal.
“We now seek your support of the resolution that Tata Sons has moved in all EGMs of our companies, for the removal of Mr Cyrus Mistry as director. Mr Cyrus Mistry was replaced as the chairman of Tata Sons after four years in that role because the board of Tata Sons lost confidence in him and in his ability to lead the Tata Group in the future,” Tata said in the letter.
The group chairman said that it was necessary to remove Mistry as he had become openly hostile toward primary promoter Tata Sons, and there was the threat that group companies could become dysfunctional.
“The right step would have been for him to resign as director. Unfortunately, he has not yet done so and his continued presence as a director is a serious disruptive influence on these company boards, which can make the company dysfunctional, particularly given his open hostility towards the primary promoter, Tata Sons.”
Reacting to Tata’s letter, Cyrus Mistry said in a statement on Wednesday night that it was a combination of misrepresentations and mis-characterisation. The ousted chairman called Tata’s explanation of the turn of events on October 24, when he was removed, as false. According to Mistry’s office, the former chairman was apprised of the Tata Sons proposal to remove him just before the board meeting. “Five minutes before the board meeting Nitin Nohria (Tata Sons director) and Tata came to Mistry’s room and told him that, on that very morning, the trustees had taken a decision to replace Mistry, ostensibly because Tata could not get along with him.”
At the meeting, every legal procedure was thrown to the winds and the “blemish-less” history of Tata Sons was destroyed, the statement added.
The $103-billion conglomerate has been mired in a battle for leadership as Tata Sons and Mistry have engaged in a public war of words in which company issues and decisions have been laid bare which, according to industrialists, could have been avoided or handled with greater grace.