Refuting allegations that he misled the selection committee set up in 2011 to find new Tata Sons Chairman, Cyrus Mistry today hit out at Ratan Tata saying his predecessor’s “conduct has eroded the Tata brand and values materially”.
On a series of allegations leveled against him by Tata Sons in a letter to stakeholders of Tata firms, Mistry said, “Repeat a lie a thousand times and hope it becomes a truth, seems to be Mr Ratan Tata’s last-ditch effort to overcome a monumental disaster his actions have unleashed.”
Earlier, Tata Sons today accused Mistry of misleading the selection panel to get selected as Chairman, retracting on his promises, concentrating powers and using free-hand given to him to weaken management structures.
The press statement from Tata Sons under Ratan Tata contains a “regurgitation of fake innuendo that Mr Tata has resorted to through unnamed and named spokesmen in recent weeks”, Mistry’s office said in a statement.
Denying the above allegations, the statement said, “On the contrary if Tata Sons had any point at all to make, it would have complied with law to form a Committee now to logically present charges against Mr Mistry. Armed with nothing better than the limp nature of contents of today’s statement, it was obviously not an option for Mr Tata.”
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Lashing out at the interim Chairman of Tata Sons, it said: “Mr Ratan Tata’s conduct has eroded the Tata Brand and values materially…Far from hurting the Tata Sons businesses intentionally, Mr Mistry is saving the Tata Group from the whimsical ineptitude of Mr Ratan Tata.”
The statement further said that the Tata Trusts have done great work in the past. “However some of the recent actions by Mr Ratan Tata and his coterie that now runs the Trusts have raised great concern on the ethics that surround decision-making.”
On the allegations of misleading the selection committee, Mistry’s office said: “Unsurprisingly, Mr Ratan Tata’s close personal friend Lord Kumar Bhattacharya, the constant feature of the Selection Committee, then and now, just six months ago spoke positively of Mr Mistry’s performance.”
On charges that Mistry gradually concentrated all power and authority and took advantage of free hand given to him, the statement said: “The structure of the Tata Sons Chairman being the Chairman of key Tata Group operating companies is something that preceded Mr Ratan Tata’s time, and an approach he encouraged and perpetuated.
“To say that Mr Mistry concentrated power in his hands across companies is meaningless since Mr Mistry expanded the oversight over his work by focusing on better board effectiveness and getting his work overseen by over 50 independent directors.”
The allegation of concentration of power is “new-found wisdom being written after seven weeks of failure to come up with any reason for upstaging Mr Mistry”, it added.
On almost all Tata boards, there was Tata Group representation, the statement said, citing examples of Ishaat Hussain on Tata Steel and TCS, Nirmalya Kumar and Bhaskar Bhatt on Tata Chemicals, NS Rajan on IHCL, Harish Bhatt on TGBL, as well S Padhmanabhan, Bharat Vasani and F N Subedar “to name a few other Tata Sons representatives on Board of other Tata Companies”.
It claimed that under Mistry’s approach, Tata CEOs serve as Tata representatives on group company boards citing examples of Noel Tata on Titan Industries and Voltas, and Praveen Kadle on Tata AutoComp.
On the claim of conflicts in handling the interests of the SP Group, Mistry’s office reiterated that he did not sit on a single Board of the SP group other than his family investment company.
“New engineering and construction contracts from the Tata Group to the SP group came down to nearly zero from the level of Rs 1,100 crore when Mr Mistry had assumed office…Starting with a firm written instruction to Tata Group companies to shun contracts with the SP Group issued in October 2013, Mr Mistry formally appraised the Tata Sons Board on the status every six months.”