Cyrus Mistry Stopped Tata Contracts For Family Firm, Says His Office

Soon after he took over as chairman of Tata Sons, Cyrus Mistry had asked group companies not to award new contracts to the Shapoorji Pallonji group, Mr Mistry's office said on Tuesday. The Shapoorji Pallonji group is owned by Mr Mistry's family.
 
"As early as October 2013, Cyrus Mistry had written to all CEOs and MDs of Tata Companies stating that no new work should be given to Shapoorji Pallonji Group in the interest of good Corporate Governance," Mr Mistry's office told NDTV. 
 
It said as a result of his instruction, "business given by Tata Group Companies to Shapoorji Pallonji Group companies has dwindled to insignificant amounts."
 
Harish Salve, a long-time legal adviser to the Tata Group, said he had "no such details" when asked about reports that concern over possible conflict of interest was a reason for Mr Mistry's abrupt removal as Chairman of Tata Sons on Monday. 
 
"I doubt. I think the decision would rest on bigger and more substantial issues," said Mr Salve, who believes there was a mismatch in values between Mr Mistry and Ratan Tata, his predecessor and who will now hold interim charge as chairman till a replacement is found. 
 
The real problem, Mr Salve said, "was the general feeling of the Board that governance needed a fix, of the group as such and not of a set of companies. That has possibly impelled the group to do something that the Tatas are not known for."
 
The Shapoorji Pallonji group is the single largest shareholder in Tata Sons with an 18 per cent stake. Cyrus Mistry will continue to be a director on the board of Tata Sons, which is the holding company for the $103 billion conglomerate, India's biggest.  
 
Mr Mistry had taken over as chairman of Tata Sons in December 2012.

Soon after he took over as chairman of Tata Sons, Cyrus Mistry had asked group companies not to award new contracts to the Shapoorji Pallonji group, Mr Mistry's office said on Tuesday. The Shapoorji Pallonji group is owned by Mr Mistry's family.
 
"As early as October 2013, Cyrus Mistry had written to all CEOs and MDs of Tata Companies stating that no new work should be given to Shapoorji Pallonji Group in the interest of good Corporate Governance," Mr Mistry's office told NDTV. 
 
It said as a result of his instruction, "business given by Tata Group Companies to Shapoorji Pallonji Group companies has dwindled to insignificant amounts."
 
Harish Salve, a long-time legal adviser to the Tata Group, said he had "no such details" when asked about reports that concern over possible conflict of interest was a reason for Mr Mistry's abrupt removal as Chairman of Tata Sons on Monday. 
 
"I doubt. I think the decision would rest on bigger and more substantial issues," said Mr Salve, who believes there was a mismatch in values between Mr Mistry and Ratan Tata, his predecessor and who will now hold interim charge as chairman till a replacement is found. 
 
The real problem, Mr Salve said, "was the general feeling of the Board that governance needed a fix, of the group as such and not of a set of companies. That has possibly impelled the group to do something that the Tatas are not known for."
 
The Shapoorji Pallonji group is the single largest shareholder in Tata Sons with an 18 per cent stake. Cyrus Mistry will continue to be a director on the board of Tata Sons, which is the holding company for the $103 billion conglomerate, India's biggest.  
 
Mr Mistry had taken over as chairman of Tata Sons in December 2012.