Ratan Tata Asks Shareholders To Help Oust Cyrus Mistry From Group Firms

New Delhi: Tata Sons' interim chairman Ratan Tata reached out to shareholders of Tata group companies on Wednesday, seeking their support to remove Cyrus Mistry from the board of these companies.

In a two-page letter, Ratan Tata said Mr Mistry was removed as chairman because the board of Tata Sons had lost confidence in him and his ability to lead the group, and that his presence in group companies can make them "dysfunctional".

Ratan Tata also said that several attempts at mediation went unheeded and that Mr Mistry had also been offered an opportunity to step down voluntarily, which he rejected and was then removed.

Justifying the move to sack Mr Mistry, Mr Tata said, "...the Board of Tata Sons lost confidence in him and in his ability to lead the Tata group in the future."

Terming Ratan Tata's letter to shareholders of Tata companies a combination "misrepresentation and convenient mischaracterisation", ousted Tata Sons Chairman Cyrus Mistry hit back saying the veteran industrialist is not speaking the truth.

Mr Tata's letter comes days ahead of key meetings at six group companies, including Tata Motors and Tata Consultancy Services, when shareholders are expected to vote on removing Mr Mistry from their board.

"The right step would have been for him to resign as director. Unfortunately, he has not yet done so and his continued presence as a director is a serious disruptive influence on these company boards, which can make the company dysfunctional, particularly given his open hostility towards the primary promoter, Tata Sons," Mr Tata wrote.

Mr Mistry's office also denied that his sacking as Tata Sons Chairman was preceded by various attempts to discuss with him.

"Mr Ratan Tata does not speak the truth. His claim that Mr Mistry's treatment at Tata Sons Board on that day was well-deliberated and was preceded by various attempts to discuss with Mr Mistry is a lie," Mistry's office in a statement said.  

In a bitter boardroom coup in October Mr Mistry was ousted as chairman of Tata Sons, holding firm of the $100 billion Tata empire, but he is still on the board of some group companies. Patriarch Ratan Tata is back at the helm temporarily, and a public power struggle has since ensued between the two sides.  

Tata Sons, in a statement last month, criticised Mr Mistry for his inability to turn around loss-making units during his four-year term as chairman, instead continuing to blame them as "legacy hot spots" and writing off huge amounts.

In response, Mr Mistry has blamed Ratan Tata for some of the company's biggest debacles and alleged failures in corporate governance at the group.

On Monday, Mr Mistry also sent a notice to shareholders of the companies seeking support against his removal, and stressed the need for governance reforms at Tata Sons, the Tata trusts, its biggest shareholder, and Tata group companies.

Ratan Tata in his letter said the group companies follow the best corporate governance standards and that Tata Sons supports them in a transparent manner through licensed use of the Tata brand, direct and indirect financial support and giving strategic advice on acquisitions, divestments and investments.

"The managements of these companies have enjoyed the operational freedom to develop and execute the right strategy as guided by their respective boards," Mr Tata said.

Here's Mr Tata's letter to shareholders: