Tata Sons on Thursday refuted allegations by ousted chairman Cyrus Mistry that he was not given a free hand to run the business even as stocks of Tata companies tumbled further. Shareholders have lost Rs 26, 473 crore over three sessions since Tuesday.
Lawyer Abhishek Manu Singhvi told a television channel that Mistry had been given the chance to make an honourable exit but had refused. “He was to step down amicably but did not,” Singhvi said.
A statement from Tata Sons said the board gave its chairman “complete autonomy to manage opportunities and challenges”. Without elaborating on the subject, the release added that “the tenure of the former Chairman was marked by repeated departures from the culture and ethos of the group”.
The release noted it was unfortunate “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.”
Mistry, according to Tata Sons, had failed to address certain queries and concerns on the business. The trustees of the Tata Trusts were “increasingly getting concerned with the growing trust deficit with Mr Mistry”, the release read.
As speculation over the confrontation between Mistry and the Tata Sons board continued, investors appeared to be getting increasingly nervous.
Anil Singhvi, founder of proxy advisory firm IiAS, pointed out that Tata Sons needed to have clarified whether Ratan Tata was an executive or a non-executive chairman.
“If he is non-executive chairman it would not be proper for him to speak to the CEOs of the companies. If he has been appointed executive chairman at 78, then strictly he would not be eligible for the post since there is an age limit of 75,” he said. “Tata Sons needs to answer why Cyrus Mistry was sacked,” he added.
In a statement released on Thursday, Tata Sons observed that as executive chairman, Mistry was “fully empowered to lead the group and its companies”.
Abhishek Singhvi, who is advising Tata Sons, added that there was no question of mediation between Mistry and Tata since this was not a matter between private individuals. Mistry, he said, has been a director of Tata Sons since 2006 and was “steeped in decision making”. A lot of the decisions were taken with his collaborative participation, he said. Singhvi noted that it is the first time a non-Tata Trust head was becoming the chairman of Tata Sons and it was incumbent on Mistry to have exercised care to keep the link between Tata Sons and the trusts. “The trusts have to be kept in the loop,” he said.