In an indication that the battle between the Tatas and Mistrys are escalating, both Cyrus Mistry and Ratan Tata camp made allegations and counter allegations days ahead of the extraordinary general meetings of six major Tata firms, including TCS and Tata Motors.
In a representation to shareholders of the the companies, ousted Tata Sons chairman Cyrus Mistry on Monday said the government has an "inherent obligation" to "remedy and repair breakdown" in the governance of Tata Trusts, the major shareholder of the group's promoter firm Tata Sons, alleging absence of appropriate structure and ethical behaviour of trustees. Meanwhile, the Tatas have countered the allegations made by Mistry, according to a report in The Times of India.
The Tata group firms are to discuss a resolution seeking Mistry's removal as director at the EGMs.
In the representation to the shareholders, he said the "governance of Tata Trusts has to become more accountable, transparent" and that the Trusts enjoy many exemptions under law including exemptions from tax since they are solely for the benefit of the general public of India.
However, he said: "In the absence of an appropriate governance structure and ethical behaviour of trustees, it would become an inherent obligation of the government to remedy and repair breakdown in the governance of such trusts."
Seeking the government's intervention in his ongoing battle, Mistry said government must ensure the working of the Tata Trusts have a defined, transparent governance structure.
"People who have been complicit or have enabled ethical and legal transgressions or have demonstrated a blatant disregard for good governance should not be allowed continue," he added.
The governance charter across the Tata Group, including the holding and operating companies requires repair to conform to company law and global best pratices such as protection of interests of all stakeholders, including minority shareholder, Mistry said.
Stating that the governance of Tata Trusts has to become more accountable and transparent, he said: "At the heart of the sustainability of the Tata Group is governance reform, throughout the institution."
Asking the shareholders of the companies to vote against the resolution to oust him and Nusli Wadia, Mistry said: "The Tata Group is no one's personal fiefdom. It does not belong to any individual, not to the trustees of Tata Trusts, not to the Tata Sons directors, and not to the directors of the operating companies."
It belongs to all the stakeholders, including each and every shareholders, he added.
Mistry said that the very future of the Tata Group lies in how the trustees govern the Tata Trusts, since the main trust property is the holding of shares in Tata Sons.
"The conferment of all decision making power in one man or a 'high command' among them is unethical, improper and a breach of trust," he said.
It is critical that serious decisions of severe magnitude and consequence are not taken whimsically, without much thought, or for unstated collateral objectives,
Mistry said in his representation.
"It is necessary to have a strong method of checks and balances in the trustees' decisions, particularly if decisions they take could indirectly give them personal benefits," Mistry said.
According to the Times of India report, Tata Sons has countered the allegations saying it was Mistry who "concentrated all power and authority only in his own hands as chairman of the major Tata companies" and that it was Mistry who tried made the company into his "personal fiefdom".
According to the company, his chairmanship in other Tata group companies was only a "corollary" to his position in Tata Sons. "Therefore, when he was removed as the chairman of Tata Sons, any other person would have stepped down from the chairmanship of Tata operating companies because he no longer enjoyed the support of the principal shareholder," the ToI report said citing a Tata Sons' statement.
The statement has also said that the Tata Trusts are governed by the individual wills of Jamsetji Tata, his two sons, Sir Dorabji Tata and Sir Ratan Tata and other founders and they trusts have been following the mandates in the wills.
"That is the reason the different Trusts continue in existence for decades. Even though disparate, the Trusts do their best to integrate their efforts and to bring about the right results," the statement said, coutering Mistry's allegations.
Earlier, Tata Sons in a nine-page letter had accused Mistry of trying to take control of one of Tata's units and creating distance between the promoter, Tata Sons, and its group companies. It also blamed him for nearly causing losses and eroding shareholder value.
Subsequently, the Mistrys had refuted the charges that he had any ulterior motive. “To allege ‘ulterior motive’ of taking over control of companies, demonstrated true independence is not there in keeping with Tata governance standards... The Tata Sons statement reflects desperation,” a statement from Mistry's office had said.
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Updated Date: Dec 06, 2016 10:09:51 IST