The bitter tussle between the Tatas and ousted chairman Cyrus Mistry came to fore at the annual general meeting of Tata Sons, as the two sides traded allegations and counter-allegations over the management of USD 110 billion salt-to-software group.
While no official statement or record of proceedings was released on the first-ever online AGM of Tata Sons held on Thursday, sources said representatives of the Mistry family firms, which are the single biggest shareholders, flagged concerns over the drop in performance and mounting debt of two major group companies -- Tata Steel and Tata Motors.
Besides, the representatives of the Mistry family, which holds 18.5 per cent stake in Tata Sons, also questioned recent investment decisions taken at Tata Sons, which according to them have gone into funding losses.
However, Tata Sons Chairman N Chandrasekaran refuted the allegations of the family, saying he was clearing the "mess" left by his predecessor Mistry.
He, according to another source, said the "mess was created in 2013-16", the period during which Mistry was the chairman of the group.
He also asserted that Tata Sons' investments in operating companies were done to correct the capital structure of group firms and prevent the default of any liabilities by them.
During the AGM, which was also attended by Tata group Chairman Emeritus Ratan Tata, the Mistry family representatives raised issues of mounting losses and borrowings at Tata Motors and Tata Steel.
They also flagged concerns regarding auditors' remarks on Tata Steel Europe and Air Asia India "for their ability to continue as a going concern".
According to the sources, Chandrasekaran responded by saying that in the past three years, lot of efforts have been made in the restructuring of Tata Steel, which witnessed the mix of profitable Indian operations increasing during the period.
He also said the revival plans of Tata Steel and Tata Motors have been affected by the coronavirus pandemic.
On the issue of losses in airline ventures, Chandrasekaran commented that the investment commitment was made in the past, and "Tata Sons does not go back on its commitment", while reiterating that the airline business takes longer to be profitable.
The Mistry family representatives had questioned if a proper analysis was done by the Tata Sons board prior to funding in these ventures -- Air Asia India and Vistara.
They also highlighted that at present Air Asia India's current liabilities exceeded its current assets by Rs 1,200 crore and its net worth has been fully eroded.
They asked if Tatas were to buy out the JV partners, would not it be just buying liabilities of the budget carrier, the sources added.
On the positive side, the Mistry family representatives appreciated the good performance of Tata Communications and the strategy of Tata Power to deleverage.
They also lauded the pledged taken by the Tata group to support the fight against COVID-19, with Tata Sons and group firms working together along with Tata Trusts, the sources said.
Tata Sons board had sacked Mistry as chairman on October 24, 2016.
Ever since, the Tatas and Mistry camps have gone through several rounds of legal battles, reaching all the way to the Supreme Court.
The apex court had in January this year stayed an order by the NCLAT that restored Cyrus Mistry as executive chairman of the Tata group, observing that there were "lacunae" in the orders passed by the tribunal.