‘Unsubstantiated claims, malicious allegations’: Tatas hit back at Cyrus Mistry

The Tata empire struck back as one at Cyrus Mistry on Thursday, using strong words to say the ousted chairman had departed from the “culture and ethos of the group” and made “unsubstantiated claims” and “malicious allegations” now that he was out.

An eight-paragraph group statement did not address blistering allegations Mistry made in an email to the Tata Sons board on Tuesday that his predecessor Ratan Tata’s decisions pushed the group into $18 billion of losses.

Neither did it refer to specific points made by Mistry about alleged dubious transactions in one of the group’s aviation businesses, AirAsia India, which prompted the aviation ministry to say it will look into the charges.

The statement refuted Mistry’s point that he was a lame duck chairman, saying the board had lost confidence in him after he failed to address repeated business concerns raised by the directors and trustees.

“As the executive chairman, he was fully empowered to lead the group and its companies… The Tata Sons board gives its Chairman complete autonomy to manage opportunities and challenges,” said Tata Sons, the holding company for the $103 billion conglomerate.

“The directors of the Tata Sons board had repeatedly raised queries and concerns on certain business issues, and the Trustees of the Tata Trusts were increasingly getting concerned with the growing trust deficit with Mr. Mistry, but these were not being addressed.”

Though sent to journalists, the statement said the group did not want a public spat.

Earlier in the day, the companies Mistry’s email named as mired in losses defend themselves. They had to -- the stock market has shaved Rs 40,000 crore off the combined value of the top 10 Tata companies since news broke of Mistry’s ouster on Monday.

Tata Power and Tata Steel told the stock exchanges – BSE and NSE had sought clarifications on Wednesday -- they had followed the guidelines. Tata Steel denied Mistry’s statement it faced impairments of $10 billion. Indian Hotels said its finances were approved unanimously, including by then chairman Mistry.

Tata Sons made the point that Mistry was not new to the working of the group, nor to its culture and ways. He joined the Tata Sons board in 2006. He was appointed deputy chairman in November 2011, and chairman on December 28, 2012.

“He would be fully familiar with the culture, ethos, governance structure, financial and operational imperatives of the Tata Group as well as various group companies,” said the statement, refuting Mistry’s claim he had been sacked without notice. “The record, as and when made public, will prove things to the contrary.”

Mistry’s representatives did not respond to Tata Sons’ statement. The few lawyers who agreed to speak on the matter appeared to side with the Tata group.

“The only consequence I see,” said Hemant Sahai, who runs his own corporate law firm, “is a Sebi investigation into the allegations.

“In my opinion there was nothing illegal in the removal of Cyrus Mistry. Probably, it could have been done in a different manner. But he has just been removed as chairman and not as a director. He continues to be on board of companies.”

Former additional solicitor general Biswajit Bhattacharya said Mistry should have expressed his concerns before his sacking, not after. “Corporate governance means all persons who are at the helm of a company are jointly responsible for the affairs and functioning of a company. Which makes Cyrus himself liable for all the allegations he made against the Tata Sons,” he added.