Under Mistry’s chairmanship, Tata Sons did not foray into any new significant business opportunities and Tata Sons’ financial performance also saw a steep decline.
Tata Sons on Thursday told the Supreme Court that under the tenure of former chairman Cyrus Mistry, the market performance of the Tata operating companies — excluding Tata Consultancy Services and Tata Motors – was below Sensex returns.
However, under Ratan Tata’s tenure as executive chairman, the market capitalisation of the Tata operating companies increased from around Rs 8,000 crore in 1991 to Rs 5 lakh crore in 2012 – an increase of approximately 60 times, and this is more than three times the Sensex return in the same time period.
Referring to “the lofty claims of increased net worth of Tata Sons” during Mistry’s tenure, Tata Sons said the Mistry family-run firms’ — Cyrus Investment and Sterling Investment Corporation — have ‘deliberately’ ignored significant impairments of around Rs 55,450 crore over the last three years that Tata Sons had to undertake primarily due to unresolved issues relating to the telecom business.
Citing certain facts and figures to show how performance of the Tata group firms deteriorated during Mistry’s chairmanship, Tata Sons rubbished the claims of the firms that there was a marked increase in the market capitalisation of the Tata operating companies, including an increase of Tata Brand value to the tune of $5 billion.
Under Mistry’s chairmanship, Tata Sons did not foray into any new significant business opportunities and Tata Sons’ financial performance also saw a steep decline. “Most significantly, Mistry as an executive chairman, was more often than not ‘finger-pointing’ and ‘blaming’ the past and failed to recognise that in the case of Tata operating companies with varied businesses, it would not be unusual to expect headwinds in some of the businesses,” the company said.