READ STORY: CYRUS MISTRY COMES
OUT WITH GUNS BLAZING IN LETTER TO TATA SONS’ BOARD
“It is a matter of deep regret
that a communication marked confidential to Tata Sons board members has been
made public in an unseemly and undignified manner. The correspondence makes
unsubstantiated claims and malicious allegations, casting aspersions on the
Tata group, the Tata Sons board and several Tata companies and some respected
individuals. These will be responded to in an appropriate manner,” Tata Sons
communicated in a press note. .
The company informed that
Cyrus Mistry, the former Chairman of Tata Sons, was on the Board of the Company
since 2006. He was appointed Deputy Chairman in November, 2011, and formally
appointed Chairman of Tata Sons on December 28, 2012. “He would be fully
familiar with the culture, ethos, governance structure, financial and
operational imperatives of the Tata Group as well as various group companies.
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,” the note
Tata Sons informed that efforts
are now being made to level accusations against individuals and company boards
for ignoring corporate governance norms that were supposedly upheld by the
former Chairman (Mistry) while in office. The Tata Sons board gives its
Chairman complete autonomy to manage opportunities and challenges. However, the
tenure of the former Chairman was marked by repeated departures from the
culture and ethos of the group, the company explained.
“The Board of Directors of
Tata Sons is composed of several eminent personalities from all walks of life.
This is not a group of people who one would expect to act without exercising
proper judgement in the best interests of the entities they sit on the boards
of. It is unfortunate that Mr. Mistry had overwhelmingly lost the confidence of
the Members of the Board of Directors for a combination of several factors. The
Directors of the Tata Sons board 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. The Tata Sons board, in its collective wisdom, took
the decision to replace its Chairman in the manner undertaken.
“The strength of the Group is
not just confined to its value system and ethics in the Board room but to a
very large extent by the adherence to the values by its 600,000 plus employees
whose spirit and cooperation has built the Group to where it is today. It is
unforgivable that Mr. Mistry has attempted to besmirch the image of the Group
in the eyes of the employees,” the note added.
Further the company noted that
it would be beneath the dignity of Tata Sons to engage in a public spat with
regard to the several unfounded allegations appearing in his leaked
confidential statement. These allegations are not based on facts or the true
state of affairs. It is convenient to put selective information in the public
domain to defend one's point of view. “There is a multitude of records to show
that the allegations made by Mr. Cyrus Mistry are unwarranted and these records
will be duly disclosed before appropriate forums, if and when necessary,
sufficiently justifying the decision made by responsible Boards of Directors,
of Tata Sons and its Group companies,” the press statement said.
The Interim Chairman in his
first interaction with senior leaders has stressed to them the need to continue
on focusing on building great businesses while emphasising on delivering strong
shareholder returns. Board members of Tata Sons have in the past stressed on
the need to be more decisively focused on bringing down debt, sharpening focus
on both the portfolio and capital efficiency.
The Tata Group is proud of its
rich legacy of contributing to the growth of the nation. During a long history,
it has faced many challenges and the employees of this group have worked hard
to create great companies, and deliver shareholder value. The Tata way is to
not run away from problems, or constantly complain about them, but firmly deal
with them and build a better tomorrow, the statement concluded.