Tata Sons hits out at Cyrus Mistry

Tribune News Service

New Delhi, October 27

Hitting out against ousted chairman Cyrus Mistry for making unsubstantiated claims and malicious allegations, Tata Sons today said the former Chairman was party to business decisions of the Tata Group for over a decade in different capacities.

Tata Sons, the parent company of the Tata Group, today issued a strong rebuttal to Mistry’s letter that group firms could face a potential $18 billion writedowns.

Tata Sons said in a statement said, “It is unfortunate that it is only on his removal that allegations and misrepresentation of facts are being made about business decisions that the former Chairman was party to for over a decade in different capacities.” Cyrus Mistry, the former Chairman of Tata Sons, has been on the Board of the company since 2006. He was appointed Deputy Chairman in November, 2011, and formally appointed Chairman of Tata Sons on December 28, 2012. The Tata Group said as the Executive Chairman, he was fully empowered to lead the group and its companies.

Responding to charges levelled by Mistry against the Tata Sons’ Board of ignoring corporate governance norms, Tata Sons said efforts are now being made to level accusations against individuals and company boards for ignoring corporate governance norms that were supposedly upheld by the former Chairman while in office.

“The Tata Sons Board gives its Chairman complete autonomy to manage opportunities and challenges. However, the tenure of the former Chairman was marked by repeated departures from the culture and ethos of the group,” it said.

Revealing the reasons for Mistry’s sacking, the Tata Group said he had lost the confidence of the Board and there was growing trust deficit.

“It is unfortunate that Mistry had overwhelmingly lost the confidence of the Members of the Board of Directors for a combination of several factors. The Directors of the Tata Sons Board had repeatedly raised queries and concerns on certain business issues, and Trustees of the Tata Trusts were increasingly getting concerned with the growing trust deficit with Mistry, but these were not being addressed. The Tata Sons Board, in its collective wisdom, took the decision to replace its Chairman in the manner undertaken,” the group said.

Following the ugly spat between the parties, Tata Group stocks continued to fall for the third day today taking the total market value erosion to over Rs 26,000 crore this week.

Tata Steel and Indian Hotels today said they have always made all relevant disclosures and have no further comments to offer following comments made by Mistry that Tata Group firms could face a potential $18 billion writedowns.

“The financial statements of the company are prepared on a going concern basis and present a true and fair view of the state of affairs of the company. As part of preparation of financial statements, the value-in-use of the assets of the company is tested for impairment as per accounting standards,” Tata Steel and Indian Hotels said.