Tata hits back at Mistry over leaked letter criticising board
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Version 0 of 1. Tata Sons has hit back at axed chairman Cyrus Mistry in an escalating war of words that pits two of India’s most powerful business dynasties against each other. Tata, a conglomerate whose UK assets include Jaguar Land Rover and the struggling Port Talbot steelworks, was responding to a leaked letter from Mistry criticising the board’s decision to oust him. In a lengthy statement, Tata said it was “beneath the dignity of Tata Sons to engage in a public spat with regard to the several unfounded allegations appearing in his leaked confidential statement”. It went on to outline a “growing trust deficit” between the rest of the board and Mistry, describing his behaviour as “unforgivable”. “It is a matter of deep regret that a communication marked confidential to Tata Sons board members has been made public in an unseemly and undignified manner,” the firm said. “The correspondence makes unsubstantiated claims and malicious allegations, casting aspersions on the Tata group, the Tata Sons board and several Tata companies and some respected individuals.” Mistry claimed in his letter that the firm was suffering from a “total lack of corporate governance”, was bent on unprofitable expansion and was also facing writedowns of up to $18bn (£15bn). This included criticism of predecessor and Tata family scion Ratan Tata, who he claimed had supported bad business decisions, including pursuing a partnership with Air Asia, against Mistry’s advice. “It is unfortunate that it is only on his removal that allegations and misrepresentation of facts are being made about business decisions that the former chairman was party to for over a decade in different capacities,” Tata continued. “The record, as and when made public, will prove things to the contrary.” The conflict is set to drive a wedge between two of India’s most powerful business families, particularly given that the Mistry family owns an 18.4% stake in Tata Sons, the largest shareholding not owned by the Tata family. Tata sought to defend the conduct of its board members in their decision to oust Mistry, which was announced on Monday. “This [the board] is not a group of people who one would expect to act without exercising proper judgment in the best interests of the entities they sit on the boards of.” Tata said Mistry had “overwhelmingly lost the confidence of the members of the board” for several reasons. These included “concerns on certain business issues”, the company said, adding that “trustees of the Tata trusts were increasingly getting concerned with the growing trust deficit with Mr Mistry, but these were not being addressed”. “It is unforgivable that Mr Mistry has attempted to besmirch the image of the group in the eyes of the employees.” Tata said in its public statement it did not want to engage in a high-profile row but justified its lengthy rebuttal of Mistry’s criticisms. “These allegations are not based on facts or the true state of affairs. It is convenient to put selective information in the public domain to defend one’s point of view.” |