In a somewhat shocking revelation, ousted Tata Sons chairman Cyrus Mistry on Tuesday claimed Ratan Tata had tried to sell Tata Consultancy Services to IBM. It was a “near-death experience for TCS at the hands of Ratan Tata”, a statement from Mistry’s office said, recounting that it was JRD Tata who turned down Ratan Tata’s proposal from IBM.
A recent Tata Sons statement had attempted to belittle Mistry’s role as chairman of TCS and Tata Motors, saying Mistry had made no material contribution to the jewel in the Tata crown.
The note said the decision to buy Corus for over $12 billion, when only a year earlier it was available at less than half that, was based on “one man’s ego” and against reservations of some board members and senior executives.
“The overpayment for Corus made it harder to invest in it, which had been neglected, and thereby, placed many jobs at risk,” it added. Moreover, Tata had decided to back CDMA technology over GSM against the advice of many of his own team members, the statement said. Attempting to put the record straight, the five-page note from Mistry’s office said it was important to do so since “insinuations and leaks are being made explicitly to create an illusion that Mistry was a ‘hands off’ chairman and TCS/JLR (Jaguar Land Rover) were on ‘auto-pilot’ during his leadership”.
The statement, the third in a series from Mistry’s office, noted that “Tata made a strategic decision to enter CDMA space despite advices to the contrary. This strategic decision led to a series of consequences that currently leave the company structurally challenged. Once again, one person’s judgment adversely affected the jobs of thousands,” it said.
In its earlier two clarifications, Mistry’s office had focused on the allegations of the group drifting away from the Tata values during his tenure, independence of directors in group companies, explanations on a surge in expenses and the huge write-offs, which the group had to take under his leadership.
A few minutes after the statement was released by Mistry’s office, the Tatas hit back by sending a requisition to Tata Power — the only Tata Group company that hadn’t yet been asked by Tata Sons to convene an extraordinary general meeting (EGM) to remove Mistry as chairman/director — to convene an EGM to do the same.
In the statement, Mistry while defending his performance as chairman has also bestowed lavish praise on several top Tata executives like TCS CEO N Chandrasekaran, Ravi Kant, former vice-chairman of Tata Motors, and Ralf Speth, CEO of JLR.
Mistry so far has been replaced as chairman of TCS and Tata Global Beverages. Meanwhile, Tata Sons has sent requisitions to the boards of other Tata Group companies like Tata Steel, Tata Motors, Tata Chemicals and Indian Hotels to convene EGMs to remove him from their respective boards.
Mistry, on his part, has found support from independent directors of Tata Chemicals and Indian Hotels, who have applauded his efforts and praised his performance. Earlier this month, three independent directors of even Tata Steel — including old Tata ally Nusli Wadia — are believed to have spoken up in Mistry’s support. Wadia’s support for Mistry has led to Tata Sons pursuing to remove him from the boards of Tata Group companies in which he is a director. An aggrieved Wadia, in turn, has sent a defamation notice to Tata Sons, saying the special notice to remove him from the Tata Steel board had lowered his image.