Mumbai:Launching a scathing attack on ousted chairman Cyrus Mistry, Tata Sons today accused him of betraying trust and trying to seek control of main operating firms of the over USD 100 billion group.

In a nine-page statement, the promoter of the major operating Tata companies made a point by point rebuttal to the letter which Mistry had written to its board members a day after he was ousted on October 24.

Tata Sons accused Mistry of trying to gain control of the Indian Hotels Co Ltd – the firm that runs Taj Group of Hotels – by using independent directors.

Mistry-headed IHCL, where Tata Sons holds just 28.01 per cent stake, had last week in a filing to stock exchanges stated that independent directors have backed the Chairman and his leadership.

“In hindsight, the trust reposed by Tata Sons in Mr Mistry by appointing him as the Chairman four years ago has been betrayed by his desire to seek to control main operating companies of the Tata group to the exclusion of Tata Sons and other Tata representatives,” the Tata Sons statement said.

Tata Sons said dividend from 40-odd Tata Group firms had declined during Mistry’s tenure while expenses have risen. It accused Mistry of demolishing the historic management structure where Tata Sons exercised control over its group companies.

“We now have an unacceptable new structure where the Chairman alone is the only common Director across several companies and this situation could not be allowed to go on,” it said.

Punching holes into Mistry’s performance over four years, it listed Tata Steel Europe, DoCoMo-Tata Tele joint venture and Tata Motors’ Indian operations as “problem companies” where there was no “noticeable improvement in operations” and the situation has worsened with widening losses, increasing debt and declining market share.

“Even with no turn-around…the only action taken was to write-off huge amounts against these companies,” it said.

Mistry had in his letter to the Directors warned of Tata Group firms facing Rs 1.18 lakh crore write-offs.

Tata Sons said the group’s debt has risen by Rs 69,877 crore to Rs 2,25,740 crore in the last four years and went on to point that the buyer of Tata’s European steel assets had dramatically turned around the company in the very first year.

It lashed out at Mistry’s handling of the crisis at Tata Steel Europe and the stand-off with Japan’s DoCoMo over the failed telecom joint venture where Tatas face USD 1.17 billion penalty for violation of contract.

Mistry removed as TCS chairman; IHCL calls EGM

New Delhi: Tata Sons has removed Cyrus Mistry as chairman of India’s largest software services firm, Tata Consultancy Services (TCS), and has called a special shareholders meeting to do the same in the hospitality firm that runs the Taj Group of Hotels.

Weeks after ousting him as Chairman of Tata Sons – the holding company of the USD 100-billion Tata Group, Mistry has been replaced as the head of TCS, the crown jewel in the Tata conglomerate portfolio, with Ishaat Hussain as interim chair.

Tata Sons, which holds a 73.26 per cent stake in TCS, has called an extraordinary general meeting of shareholders “to consider a resolution for the removal of Cyrus P Mistry as Director of the Company,” the software firm said in a regulatory filing.

Besides, a similar shareholder meeting of Indian Hotels Company Ltd, where Tata Sons holds 28.01 per cent, has been called to seek removal of Mistry as director of the company.

TCS said it has has received a letter dated November 9, 2016 from Tata Sons Ltd nominating Hussain as the Chairman of the Board of Directors of the company in place of Mistry with immediate effect.

“In view of this, Mistry has ceased to be the Chairman of the Board of Directors of the company and Hussain is the new chairman of the company,” TCS said.

Hussain, a director of several Tata companies, including Tata Steel and air conditioning and engineering arm Voltas Ltd, will remain TCS chairman until a permanent new replacement is done.

He currently serves as chairman of Voltas and satellite television provider Tata Sky.

“Tata Sons has issued a special notice under Section 169 read with Section 115 of the Companies Act, 2013 and a requisition for convening an extraordinary general meeting of shareholders of the company under Section 100(2) of the Companies Act, 2013 to consider a resolution for the removal of Cyrus P Mistry as Director of the Company,” TCS added.

While the ouster of Mistry triggered a public spat between him and Tata Sons, his family continues to controls an 18.41 percent stake in Tata Sons. Mistry, who was replaced by his predecessor Ratan Tata as interim Chairman of Tata Sons, continues to be the chair of some of the key listed group companies. These include Indian Hotels, Tata Motors and Tata Steel.

“… a requisition is received from Tata Sons, a shareholder of Indian Hotels Company Ltd, holding 28.01 per cent of the paid-up equity share capital of the company to convene an extra-ordinary general meeting of the shareholders of the company… to pass the resolution for removal of C P Mistry as Director of the company,” the hospitality major said in a BSE filing.

Last week, IHCL had in a regulatory filing stated that independent directors had unanimously backed Mistry and supported his continuance as chairman of the company.

Mistry camp dubs Tata Sons’ claims unsubstantiated, half-truth

Mumbai: Ousted Tata Sons Chairman Cyrus Mistry’s camp on Thursday termed as “unsubstantiated claims and half truths” a series of allegations by the company, which stated that he betrayed trust and tried to seek control of main operating firms of the over USD 100 billion group.

Responding to a statement by Tata Sons, sources close to Mistry said after 17 days of silence on his “unjustified and unexplained removal”, there was still no “word of explanation as to why it became necessary to remove him summarily violating natural justice and without explanation”.

The statement, they said, “has not much but selective data, unsubstantiated claims and half truths”.

On claims that Mistry had an ‘ulterior motive’ of taking control of companies, a source said: “Giving the example of Indian Hotels only because independent directors — one of whom is also a director of Tata Trust — demonstrated true independence, is not in keeping with Tata governance standards.”

The sources also said removing TCS from data in assessing Mistry’s performance stating he does not really contribute materially to the company and to blame him for all problems inherited by him such as Tata Motor’s passenger vehicle business in India is “inherently fallacious to any unbiased observer”.

Mistry camp also refuted allegations of “significant issues of conflict of interest in relation to the Shapoorji Pallonji Group” saying “it is a smear campaign unworthy of either the Tata Group or a response, particularly when it (is) known that Mr Mistry had instructed all Tata companies not to enter into new contracts with that Group”.

Insisting that the Nomination and Remuneration Committee (NRC) of Tata Sons lauded Mistry’s performance on June 28, the sources said the NRC’s report was adopted by the complete board the following day.

“Tata Sons is yet to state what necessitated the replacement of Mr Mistry on October 24 without any notice or an opportunity to defend himself,” a source said.

Calling the Tata Sons statement as a reflection of “desperation”, a source said: “All the ‘reasons’ in the letter, would have, and should have, been tabled and recorded in the minutes of the many Tata Sons board meetings held over four years of Mr Mistry’s Chairmanship. Unfortunately for them, no such record exists because these allegations are simply not true.”

A source said: “The ‘reason’ were not tabled even on October 24. That after 17 days, this is the best that can get said is heart-warming.”

PTI