Cyrus Mistry issues statement, denies possibility of immediate legal war with Tata Sons

The dust is yet to settle from the tremors that were triggered after the sudden sacking of Cyrus Mistry as chairman of the salt-to-software conglomerate Tata Sons. Even as speculations are rife as to who might finally get the responsibility of holding the reins from interim chairman Ratan Tata, the grapevine is equally speculative on what Mistry might do next.

 Cyrus Mistry issues statement, denies possibility of immediate legal war with Tata Sons

Cyrus Mistry. AP

To put an end to rumours flying thick and fast, a statement was issued on behalf of the ousted Tata Group chairman saying that there are no immediate plans to take the legal route to challenge the decision of the Tata Trusts as reported by many media outlets.

The statement, which was published on The Economic Times read:

"Events of the past 24 hours obviously involve an element of sensitivity if not surprise. They need time for being assessed. As and when a public statement becomes necessary, it would be made."

"Neither the SP Group nor Mr Cyrus Mistry has made any statement yet. While the circumstances are being studied, there is no basis to media speculation about litigation at this stage."

Quoting a senior lawyer, The Times of India had earlier reported that Mistry could take the legal course very soon.

"We are getting ready to move the high court as soon as possible — could be Tuesday or Wednesday — against this illegal decision that violates strict provisions for such sacking under the Articles of Association," said a senior lawyer close to Mistry had told the national daily.

According to a Reuters report, Mistry took over the charge of the Tata Group from Tata in December 2012. Mistry was zeroed in as the successor to company patriarch after a 15-month search. For the ousted chairman the problems were many from a costly settlement with Japanese telecoms operator NTT Docomo to the sale of Tata Steel's loss-making business in Britain.

Despite the problems that the Tata Group was saddled with Mistry at its helm, his unceremonious departure not only stunned the corporate world both India and abroad but also set off a fall in share prices of the company firms indexed on the bourses.

"We have not seen any panic selling in any Tata group stocks so far. There's a broad market weakness currently, and hence we are seeing some downturn in select Tata group stocks. The exit of Cyrus Mistry may not lead to intense selling in any group stocks, as some companies like Tata Steel are facing fundamental problems like weak steel demand in UK and lingering slowdown in Europe, which has hurt the company's prospects for quite some time," said G Chokkalingam, founder and managing director, Equinomics Research and Advisory.

The removal of Mistry from the topmost position of the group was swift.

A statement to this effect that was released on Monday said: "Tata Sons today announced that its Board has replaced Mr Cyrus P Mistry as Chairman of Tata Sons. The decision was taken at a Board meeting held here today.

"The Board has named Mr Ratan N Tata as Interim Chairman of Tata Sons. The Board has constituted a Selection Committee to choose a new Chairman. The Committee comprises Mr. Ratan N Tata, Mr Venu Srinivasan, Mr Amit Chandra, Mr. Ronen Sen and Lord Kumar Bhattacharyya, as per the criteria in the Articles of Association of Tata Sons. The committee has been mandated to complete the selection process in four months."

Such was the speed of his dismissal that no trace of the short Mistry legacy was available on the company website post his departure.

A report in The Economic Times said that soon after Mistry's removal as the chairman of the Tata Sons, the link to his first and last interview was removed from the company website.

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Updated Date: Oct 25, 2016 15:25:51 IST