In a scathing e-mail to the Tata group board, former Tata Sons chairman Cyrus Mistry has attacked the way he was sacked saying the move was "unparalleled in the annals of corporate history", according to media reports.
According to report, Mistry has said in the email that he was "shocked" at the manner the board has conducted itself in ousting him. He has said the "board has not covered itself with glory" as he was not "given a chance to defend himself"
In the email, according to a report in The Economic Times, he has also alleged that he was not given freedom to act at his own will as the group made changes to the articles of associations.
This charge actually proves to a large extent that at least one of the major speculations about the reasons behind the sacking of Mistry is true.
Most experts have been saying that the decision to affect a sudden change of guard at the group was the hard decisions being taken by Mistry to set the house in order. The group has taken up a lot of debt as part of its global expansion over the last few years under Ratan Tata's chairmanship.
Explaining his plans for the group, Mistry had said in an interview to its in-house magazine, which has mysteriously disappeared from the site now, he said: "It was clear to me relatively early that one needed to confront the challenging situations facing some of our businesses, and ultimately this would entail hard decisions on pruning the portfolio."
After removal of Mistry, many analysts had said these words may have been one reason for the Tata Sons decision.
"Tata group has taken a very tough decision..may be Cyrus Mistry's way of functioning did not gel with the group's overall decision makers. Cyrus had taken some tough decision in the past like hiving off some non-profitable businesses and setting goal towards making the group a more profitable venture," A K Prabhakar, head of research, IDBI Capital Market, had told Firstpost.
According to the ET report, Mistry has said in the mail: "To “replace” your chairman without so much as a word of explanation and without affording him an opportunity to defend himself...must be unique in the annals of corporate history,” Mistry said in the email."
In the press release announcing the removal of Mistry, the group just said Mistry is being replaced as chairman of Tata Sons with Ratan Tata. It did not even have a customary thank you note.
The group has set up a committee to select a permanent leader and final decision is expected in four months.
Meanwhile, the Tata group has filed caveats in the Supreme Court, the Bombay High Court and National Company Law Board Tribunal in an attempt to pre-empt any litigation by the Shapoorji Pallonji group.
Mistry’s father, Shapoorji Pallonji Mistry, is the single largest individual shareholder in Tata Sons with 18.4 percent stake. Tata Trusts hold about 66 percent.
Published Date: Oct 26, 2016 12:13 pm | Updated Date: Oct 26, 2016 12:22 pm