Mistry converted Tata into personal fiefdom: Tata

Referring to Rs 1 lakh-crore market cap loss since Mistry's ouster, Tatas said Mistry's statements have caused enormous damage

The Tata group said on Monday that Cyrus Mistry had converted the group into his personal fiefdom which finally led to his ouster as chairman. 

In a statement, the Tatas said Mistry repeatedly referred to the need for the highest norms of corporate governance but long before the phrase became fashionable to talk about, most Tata companies already had a good track record on this count. 

The statement alleged that after he became the chairman of Tata Sons, Mistry converted the group into his personal fiefdom with unilateral actions destroying the precious institutional memory of the House of Tata. 

Although the Tata Trusts interact with 450 NGOs and with more than 1,000 people in the field, he chose to isolate the Tata Trusts and duplicate the infrastructure solely responsible to him for various so-called new initiatives, it added.  

Commenting on Tata Trusts and their structure, the Tata statement said: The Trusts are governed by the individual wills of Jamsetji Tata, his two sons, Sir Dorabji Tata and Sir Ratan Tata, and other founders. The Trusts have been scrupulously following the mandates set out in the Wills. That is the reason the different Trusts continue in existence for decades.

The Tatas said Mistry has gradually over the past three/four years concentrated all power and authority only in his own hands as chairman in all the major Tata operating companies where there is no longer any representatives from the Board of Tata Sons, the main promoter and largest shareholding group, as has always been the case in the past. 

Mistry was appointed the chairman of various Tata operating companies only as a corollary to his chairmanship of the parent company, Tata Sons, which has been a long-standing convention in the group. Therefore, when he was removed as the chairman of Tata Sons, any other person would have stepped down from the chairmanship of the Tata operating companies because he no longer enjoyed the support of the principal shareholders of Tata Sons. Instead, Mistry has chosen to fight this in the media even at the cost of hurting and damaging the Tata group, including Tata companies, even while remaining as its chairman, said the Tatas. 

Mistry's statements have caused the group (including the companies where he continues to be the chairman) enormous damage and caused considerable financial loss to all shareholders, running into tens of thousands of crores, the Tatas said referring to the Rs 1 lakh-crore market cap loss since Mistry's ouster.

The operating Tata companies and Tata Sons have, for many decades, worked cohesively and seamlessly for the benefit of all stakeholders namely the companies, their shareholders and employees and for society at large. There was no other agenda or personal interest as ultimately, even the dividends paid to Tata Sons and subsequently to its own shareholders went largely back to philanthropy except for those paid to the minority shareholders. The operating Tata companies have individually grown and prospered but they have also benefited in no small measure from being part of the Tata group. It is the Tata legacy that has attracted capital in all forms and gives the comfort of safety because of the past default-free record. Therefore, Tata companies do not exist in a vacuum but benefit from being part of the Tata group, which is most evident in times of difficulty. It is all this that is at stake said the Tatas. 

The Tata group has enjoyed the confidence of generations of shareholders for more than a century. The shareholders of Tata group companies are eminently qualified to see through the smokescreen of baseless allegations being passed off as an appeal to shareholders, the statement noted.