Mistry deviated from company ethos, say Tatas

Tata Sons on Thursday said Cyrus Mistry, the chairman it sacked earlier this week, had repeatedly flouted the company’s ‘culture and ethos’.

The charge came a day after Mistry criticised projects dear to his predecessor, Ratan Tata, who has returned from retirement to take over as interim chairman.

The salt-to-software conglomerate also spoke about a growing ‘trust deficit’ as the reason for its decision to part ways with Mistry.

On Tuesday, a day after the 48-year-old Mistry was replaced, he fired his first salvo, saying he had resisted being made a ‘lame-duck chairman’.

Representing the Shapoorji Pallonji Group — the single largest shareholder in Tata Sons — Mistry targeted Tata (78) on multiple counts, including the Nano car and Air Asia ventures.
Tata Sons hit back as the battle intensified.

Vehemently questioning Mistry’s accusations, contained in an email he wrote to the board of directors and trustees of the Tata family trusts, Tata Sons, said: “The Tata Sons board gives its chairman complete autonomy to manage opportunities and challenges. However, the tenure of the former chairman was marked by repeated departures from the culture and ethos of the group.”

In a press statement, Tata Sons said it was unfortunate that Mistry had overwhelmingly lost the confidence of the board for a combination of factors.

“The directors of the Tata Sons board had repeatedly raised queries and concerns on certain business issues, and the trustees of the Tata Trusts were increasingly getting concerned with the growing trust deficit with Mistry, but these were not being addressed,” the company said in a strongly worded statement.

On Mistry’s sacking, the statement explained, “The Tata Sons board, in its collective wisdom, took the decision to replace its chairman in the manner undertaken.”

Tone ‘unforgivable’

Tata Sons is upset about the contents of Mistry's email to the board and trustees.

Its statement says: “The strength of the group is not just confined to its value system and ethics in the board room, but to a very large extent by the adherence to the values by its 600,000 plus employees whose spirit and cooperation has built the group to where it is today. It is unforgivable that Mistry has attempted to besmirch the image of the group in the eyes of the employees.”

Stocks lose ground

Tata group stocks lost ground for the third day on Thursday amid concerns about a purported disclosure made by ousted group chairman Cyrus Mistry about huge write-down risks at some firms, taking the total market value erosion to over Rs 26,000 crore this week, reports DHNS from Mumbai.