Tata Sons accuses Cyrus Mistry of betraying company's trust in nine-page letter
The ousted chairman's office, however, said the statement contained 'unsubstantiated claims and half truths'.
Tata Sons issued a nine-page statement on Thursday in which it said that ousted chairperson Cyrus Mistry betrayed the trust of the company. In the statement, which details why Mistry was removed from the post of chairperson last month, the company held him responsible for its dwindling revenue. “Dividends received from all other 40 companies has continuously declined from Rs 1,000 crore in 2012-13 to Rs 780 crore in 2015-16,” it said.
Tata Sons also alleged that Mistry neither implemented the growth plans he had envisioned nor put in place the management structure during his four-year stint. “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 the main operating companies of the Tata Group to the exclusion of Tata Sons and other Tata representatives,” said the statement.
In response, Mistry’s office alleged that the statement released by Tata Sons had “unsubstantiated claims and half truths” and did not explain why he was ousted from the chairman’s position “without notice or an opportunity to defend himself”. “Tata Sons’ statement reflects desperation,” Mistry’s office said, adding that the board had received a number of calls and emails since its decision to remove him from the post.
Regarding Shapoorji Pallonji Group, Tata Sons accused Mistry of never addressing the issues that caused the conflict of interest. Mistry’s family’s Shapoorji Pallonji Group owns around one-fifth of Tata Sons. The nine-page statement comes the same day Tata Sons announced the appointment of Ishaat Hussain to replace Mistry as the interim chairperson.
On October 24, the Tata board had decided to oust chairperson Cyrus Mistry. The group had also filed caveats as a preventive measure, “fearing legal action” by Mistry, who had become chairman of the company in 2012. In a letter to his employees, Ratan Tata had said the decision, which has thrown the $103-billion conglomerate into turmoil, was “absolutely necessary” for the group’s success.