As a former chairman of the Tata Group, and also a large shareholder himself, Cyrus Mistry would have done well by trying to ensure that shareholders’ interests in the group companies were protected while his battle for reforming Tata operations continued – something that he has decided to do now.
Cyrus Mistry’s decision to step down from the six listed Tata Group companies yesterday and shift his battle against Ratan Tata to a forum where the rule of law and equity is upheld is a step in the right direction, though a delayed one.
That he was sincere in changing the functioning of the Tata Group for well as chairman can’t be questioned, but it is also equally true that he knew from the very beginning that he will have to deal with the strong presence of Ratan Tata in all the affairs.
So, whether a collision course was a better way to deal with the situation, which he opted for; or, a wait for the favourable time to initiate the required actions, could have been more appropriate; is a question that only Mistry would be in a position to answer going ahead.
But, the events and actions after his ouster and Ratan Tata taking over as the interim chairman, proved unquestionably that the shareholders’ interests took a back seat and both the sides are equally responsible for that.
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It is good that Mistry has now understood it finally. In his statement on Monday, he said, “It has now been eight weeks, waiting for concrete reasons to be provided by Mr. Ratan Tata for the illegal coup he staged on the 24th of October. Nothing cogent has been forthcoming. Having reflected deeply, I think it is time to shift gears, up the momentum, and be more incisive in securing the best interests of the Tata Group.”
Mistry has also pointed out that, “In recent weeks, I have brought to the fore various ethical issues and evidence of governance breakdown in the Tata Group at the hands of certain trustees.”
While it is pragmatic that he has decided now to shift the battle from EGMs to the legal and regulatory domain, he should be extremely cautious in raising issues that have the potential of harming Tata firms and shareholders’ – a battle of principle must be fought ethically even if it comes at the cost of loss.