Ousted Cyrus Mistry's hostile defence takes Tata boardroom battle public

Days after he was ejected as chairman of Tata Sons, Cyrus Mistry has stunned India with a hostile 5-page letter outlining governance failures, poor decisions and looming writedowns at one of the country's most revered conglomerates.

Mistry's emailed parting shot, leaked late on Wednesday, turned into a viral sensation in India by Thursday morning, captivating readers on social media and prompting shocked headlines in leading dailies, as the government told politicians to stay out of what has become a public spat.

The country's two largest exchanges, citing the leaks, have demanded clarity from Tata's 27 listed units.

At least one unit, Tata Steel dismissed talk of writedowns. But shares in all of the group's major listed companies fell on Thursday.

Tata Sons has not commented since the letter surfaced.

Public confrontations of this nature are rare in Indian corporate life, particularly when they involve conservative and established conglomerates like salt-to-cars group Tata and a patriarch like Ratan Tata, who has temporarily taken back the helm of the parent group.

"It has taken everyone by surprise. Nobody would have thought such things could happen at Tata," said J. N. Gupta, a former executive at India's markets regulator and now managing director at Stakeholders Empowerment Services.

Lawyers, analysts and headhunters cautioned the letter could be the start of a bitter legal battle - but was already a warning to any willing candidates on challenges ahead in running a sprawling and complex group.

"Any candidate that is now in the race or is considered, will pull up and refer to the letter from Cyrus Mistry,” said Suresh Raina, managing partner, Hunt Partners, an executive search firm.

"It is a cautionary note...The new candidate will be very well primed."

Mistry, chairman of Tata Sons since 2012, accused the board of failing to give him "room to move", and argued Ratan Tata acted as an alternative power centre after officially handing over the reins, driving in particular deals that created two airline businesses.

Its Tata Motors arm extended credit too easily to fuel sales, Mistry said, and when fraudulent dealings surfaced at AirAsia India, they were not acted on fast enough.

Ratan Tata's lawyer Abhishek Manu Singhvi, dismissed the accusations in comments to local television and questioned the purpose of the "blame game".

"Loss of confidence is a collective and subjective thing."

Yet governance experts said Tata would need to tackle the allegations, for which Mistry provides no proof.

"Either Tata comes out and denounces them successfully or they will lose their reputation as one of the best governed companies in the country," Gupta said.

Mistry is still chairman at the operating level at several group units including Tata Motors, Tata Steel and Tata Consultancy Services.a