 "Mistry took advantage of free hand to weaken management structures, says Tata Sons")
In a no holds barred on its ousted chairman Cyrus Mistry, Tata Sons said he misled the selection committee set up in 2011 for selecting a chairman to succeed Ratan Tata.
"Mistry made lofty statements about plans for Tata Group, but didn't give into effect management structures and plans he promised," stated Tata Sons.
Mistry did not distance himself from his family enterprise Shapoorji Pallonji & Co as promised, Tata Sons further stated in a press release.
"Mistry's retraction from commitments created grave concern on his ability to lead Tata Group devoid of personal conflicts and put to risk high standards of self philosophy," said Tata Sons.
The conglomerate further stated that dividend income (other than from TCS) declined continuously and staff costs more than doubled during Mistry's tenure.
"Mistry gradually concentrated all powers and authority, systematically diluting representation of Tata Sons on Boards of group companies. Mistry took advantage of free hand to weaken management structures," said Tata Sons.
"This retraction, created grave concerns on Mr Mistry's ability to lead the Tata Group devoid of personal conflicts and put to risk the high standards of self-less governance, that lies at the core of the Tata philosophy," it said.
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Mistry, it said, had over the past 3-4 years concentrated all power and authority only in his own hands as Chairman in all the major Tata Group operating companies and "gone about systematically diluting the representation of Tata Sons on the Boards of various Tata Companies."
Mistry took advantage of the "free hand" and trust "to weaken management structures in Tata Companies acting contrary to his fiduciary duties," Tata Sons said in the appeal to shareholders.
Tata Sons said its Board has been concerned for some time about the financial performance as the holding company's dividend income (other than from TCS) declined continuously and staff costs more than doubled.
"All this would have resulted in losses but for the TCS dividend. Mr Mistry did not show concern about these issues and the increasing dependence of Tata Sons on TCS. The Board could not accept this any further as it had the potential to risk the financial viability of Tata Sons," it said.