Cyrus Mistry had rejected an offer to voluntarily step down from his position as chairperson of Tata Sons, Interim Chairman Ratan Tata said in a letter to shareholders of the conglomerate’s companies on Wednesday. He added that Mistry was ousted because the board of Tata Sons had “lost confidence in him and in his ability to lead the Tata Group in the future”.
“This deliberated action by the Tata Sons board was taken after the relationship with Mr Mistry steadily deteriorated, and several attempts to remediate went unheeded,” Ratan Tata said in the letter, adding that Mistry himself had requested that the matter to be taken up by the board of Tata Sons.
The former chairperson’s continued presence as director of several operating companies of the group was a “disruptive influence” on their functioning, the letter further said, seeking shareholders’ support in removing Mistry from the position at special general meetings called to discuss the matter. The letter also said that group companies were “supported by Tata Sons transparently in multiple ways” and were “respected for promoting and practising the best corporate governance standards”.
The letter comes a day after Mistry said the group companies were exposed to regulatory violations by “individuals prone to impulsive control”. He had alleged that the individuals were “seeking to procure price sensitive information from listed Tata Group co[mpanie]s, breaking down governance” at the firms, emphasising that he was fighting to protect the companies from Ratan Tata.
The ousted chairperson had earlier claimed that investigations into AirAsia’s accounts had revealed fraudulent transactions worth Rs 22 crore, after which the Enforcement Directorate filed a case against the airline. Mistry, who was removed from the position on October 24, had also accused the Tata Sons board of “wrongful dismissal”, adding that they faced $18 billion (Rs 1.15 lakh crore approximately) in write downs or reduction in value of assets.