NEW DELHI: Cyrus Mistry, who was abruptly removed as Chairman of the Tata Group on Monday, emailed board members to say he is “shocked beyond words” by how he was ousted. “To replace your Chairman without as much as a word of explanation and without affording him the opportunity of defending himself…. must be unique in the annals of corporate history,” he said.
In the five-page email sent a day after he was sacked, Mr Mistry accused Ratan Tata, who is both his predecessor and his replacement, of interference that reduced him to a “lame duck Chairman.”
Mr Mistry, 48, warns the board of the $103 billion group that it faces a potential drop in value of nearly $18 billion due to investments in unprofitable businesses – five areas that he tags as “legacy hotspots.” The debts of the Tata Group currently run close to $30 billion.
In late 2012, Mr Mistry became the first outsider from the founding family to head India’s largest conglomerate. He has been replaced by Mr Tata, 78, for four months while a permanent new chief is identified.
There was a clear mismatch of values between Mr Mistry and Mr Tata, said Harish Salve, a long-time legal adviser to the group. Mr Mistry’s decisions to sell assets acquired by the group’s patriarch – including its steel interests in the UK – had not gone down well with the board and were seen as doing international damage to the company’s formidable reputation.
Other sources who spoke on the condition of anonymity said Mr Tata believed that he would be “thrown under the bus” by Mr Mistry for the DoCoMo deal. In 2010, Japanese firm DoCoMo bought into Tatas’ telecom company, but decided to exit in 2014 because it was accumulating subscribers more slowly than rivals. After Tata was unable to find a buyer, it was stopped from acquiring DoCoMo’s stake by the Reserve Bank of India. Tata has now been ordered to pay $1.2 billion to DoCoMo by an international arbitration court.
Lobbing back allegations that he presided over sliding revenues, Mr Mistry details deals, including in aviation, where he says he was given no say by Mr Tata. “I cannot believe I was removed on grounds of non-performance,” he said.