Former Tata Group executives refute ousted chairman Cyrus Mistry’s claims
While FC Kohli said there was never any plan to sell TCS, B Muthuraman said Mistry’s comments about the Corus acquisition were ‘speculative and biased’.
Two retired Tata Group executives refuted ousted chairman Cyrus Mistry’s claims that Ratan Tata wanted to sell Tata Consultancy Services to IBM and Tata Steel’s acquisition of European steel company Corus for $12.1 billion (Rs 83,000 crore approximately) was an “ego-driven” step. “At no point at that time was there ever an intention of the Tata Group to sell TCS to IBM,” TCS founding Chief Executive Officer FC Kohli said on Wednesday.
Moreover, former vice chairman and managing director of Tata Steel B Muthuraman said Mistry’s claims about the Corus acquisition in 2007 were “speculative and biased”. Tata Steel also issued a statement rebutting Mistry’s allegations.
Regarding Ratan Tata wanting to sell TCS to IBM, Kohli said it was a misrepresentation of events. “With reference to the timeline of the entire episode I would also like to point out that my heart bypass surgery took place in 1984. JRD Tata was interested in my health and progress after the surgery. He also wanted to know when I would be well enough to return to India,” read Kohli’s statement. To this, Mistry’s office said that the earlier statement was based on “information from sources who were close to JRD Tata”. They had informed Mistry that it was “Ratan Tata’s intention, and not the group’s intention, to sell TCS”, Mistry’s office said.
Muthuraman said the purchase of Corus turned out to be a costly affair for the company because of the “sudden and unprecedented scale of the global financial crisis in 2008”. Tata Steel issued a separate statement, making similar claims. It said the acquisition was “based on the long-term strategy of the company to pursue growth through international expansion” but the 2008 recession caused “financial hardship to the entire industry.”
On Tuesday, Mistry had said the possible sale of TCS to IBM was a “near death experience” for the company. His office had further claimed that his predecessor’s “ego” led to the group’s acquisition of Corus. The company – which later changed its name to Tata Steel Europe – was available for sale a year earlier at half the price. Mistry said the decision to acquire it “went against the reservations of some board members and senior executives”.
Mistry was ousted as chairperson on October 24. The Tata Group has accused Mistry of being responsible for its dwindling revenue. In a letter to his employees, interim chairperson Ratan Tata had said the decision to sack Mistry was “absolutely necessary” for the group’s success.