Mumbai: Stepping up his fight against Tatas and patriarch Ratan Tata, ousted Chairman Cyrus Mistry on Monday sought the government’s intervention to “remedy and repair breakdown” in the governance of trusts managing Tata Sons – the holding firm for over USD 100 billion conglomerate.
In an apparent reference to Ratan Tata, Mistry also made a case for decision-making to be not concentrated in a single individual, saying conferment of all power in one man or a “high command” is unethical and a breach of trust.
Reaching out to shareholders of six Tata group firms, where promoters have called EGMs to remove him from their boards, Mistry said, “The Tata Group is no one’s personal fiefdom: it does not belong to any individual, not to the trustees of Tata Trusts, not to the Tata Sons directors, and not to the directors of the operating companies. “It belongs to all the stakeholders, including every one of you.”
In his letter to shareholders ahead of the EGM to remove him from the group’s crown jewel TCS on December 13, Mistry questioned why no reasons were cited for his dismissal and wondered if this was another case of Ratan Tata’s arbitrary functioning.
“The impression sought to be created was that there was something unspeakable underlying his inexplicable and unreasonable conduct. More importantly, the signal was that Ratan Tata had an absolute right to do as he willed without having to explain himself to anyone,” Mistry said. “The conferment of all decision-making power in one man or a ‘high command’ among them is unethical, improper and a breach of trust. It is critical that serious decisions of severe magnitude and consequence are not taken whimsically, without much thought, or for unstated collateral objectives,” said Mistry, whose family owns 18.4 per cent in Tata Sons.
Various Tata Trusts of which Ratan Tata is lifetime chairman, owns 66 per cent in Tata Sons, and are all public trusts.
Stating that his attempts to effect reform in the group’s working were cut short with his abrupt dismissal on October 24, Mistry pitched for government intervention in the matter. “In the absence of an appropriate governance structure and ethical behaviour of trustees, it would become an inherent obligation of the government to remedy and repair breakdown in the governance of such trusts,” Mistry said.
Making a strong plea for reform in the Tata Trusts, Mistry expressed fears of the vision of the Tata founders being “under threat” unless governance reforms are initiated.
Listing out a slew of instances in the recent past, Mistry alleged that there was “collapse” of governance at Tata Sons and Tata Trusts. These include the action against Bombay Dyeing’s Nusli Wadia for speaking up against misconduct, collapse of the move to have a productivity-based wage agreement at Tata Motors, Tata Motors’ independent directors being disallowed to air their views, etc.
Asserting that his association with the Tatas has been a matter of pride so far, Mistry reiterated that he took up the post of chairman of Tata Sons after being assured of a free hand by Ratan Tata.
Mistry, who has not met the media throughout his four-year tenure as the chairman, said the desire was not to “craft a personal image” for himself and his actions were driven by the desire to protect the group from threats “from without and within”.
Mistry caused huge financial loss: Tata
Refuting Cyrus Mistry’s allegations of “breakdown” in the governance of trusts managing Tata Sons, the group holding firm said the trusts are governed by individual wills of Jamsetji Tata and his two sons, and accused the ousted Chairman of causing huge financial losses. Tata Sons, the holding firm for over USD 100 billion conglomerate, said Mistry’s statements have caused the group, including the companies where he continues to be the Chairman, “enormous damage and caused considerable financial loss to all shareholders, running into tens of thousands of crores”. “The Trusts are governed by the individual Wills of Jamsetji Tata, his two sons, Sir Dorabji Tata and Sir Ratan Tata, and other founders. The Trusts have been scrupulously following the mandates set out in the Wills,” Tata Sons said in a statement. That is the reason the different Trusts continue in existence for decades, it added.
