Cyrus Mistry accuses Ratan Tata of staging 'illegal coup', says he will resign from group companies
Tata Sons called the public announcement of resignation 'a deliberate strategy' on the part of the ousted chairperson.
Ousted Tata Sons chairperson Cyrus Mistry has decided to resign from all Tata Group companies saying it was time to shift gears and “be more incisive in securing the best interest of the Tata group”, the Economic Times reported on Monday. He said that “an illegal coup” was staged by Ratan Tata on October 24, the day when he was sacked from his post in the company.
“In order to be more effective, serve the objective of governance reform, and to regain lost ethical ground, I have decided to shift from the forum of the EGMs to a larger platform and also one where the rule of law and equity is upheld,” he wrote in a letter to the board of Tata Sons and shareholders.
He said he has been trying to resolve the governance break down at Tata Sons for a considerable period of time. He also alleged that Ratan Tata and Nosher Soonawala, Trustees of Tata Trusts, refused to stop meddling in the key decisions involving the company, despite having retired from their posts.
He further said he had tabled a report on fraudulent transactions in the accounts of AirAsia India at a board meeting on October 24, however, that discussion never happened. “With full knowledge of the fraud, further funds were released to AirAsia India. Yet, no concrete steps, expected of an ethical organisation to fix responsibility for the fraud have been taken till date,” Mistry said.
He concluded by saying he will work on protecting the interests of the Tata Group and “realising the vision of our Founder, Jamsetji Tata, until my last breath.”
Tata Sons released a statement soon after Mistry’s letter surfaced, calling the public announcement of resignation “a deliberate strategy” on Mistry’s part.“Cyrus Mistry’s resignation is a deliberate strategy on his part, knowing fully well that the overwhelming majority of the shareholders were not in support of his actions,” the statement said. The company said Mistry’s allegations made in the letter were “baseless, unsubstantiated and malicious” in nature.
“Tata Sons strongly resents the claims by Cyrus Mistry to align with the values and ethics of Jamsetji Tata and the Tata Group. On the contrary, Mr. Mistry and his family companies have not upheld the high standards and values set by Jamsetji Tata and his successors,” the statement said. The company also said that Mistry has not done anything “to build the goodwill of the Tata Group”. The company also pointed out that though Mistry had been part of its business decision for over a decade, he chose to make allegations and misrepresentation against the company only after his removal.
Mistry was removed from the post of chairman of the company on October 24, and Ratan Tata took over as the interim chief. On December 14, Mistry was sacked from Tata Teleservices’ board of directors, two days after he was removed as the director of Tata Industries. The company has also accused Mistry of misleading the 2011 selection committee set up to appoint Ratan Tata’s successor. It alleged that Mistry took advantage of his position to “systematically” dilute the representation of Tata Trusts on the boards of group companies.