Hardening its stand, Tata Sons on Sunday said its management will do whatever is required to deal with the situation arising out of the ouster of Cyrus Mistry and wanted its independent directors to ensure future of Tata companies and interest of all stakeholders is protected.
In a late-evening statement, Tata Sons said in its statement on November 10, 2016, it has already put forward facts so that the decision of the Tata Sons board “to replace Cyrus P Mistry as chairman is seen in the desired perspective”.
“The Tata Sons management will do whatever is required to deal with the situation,” it said. Last week, the promoter company of the major operating Tata group firms had accused Mistry of betraying trust and trying to seek control of main operating companies of the over USD 100 billion group.
It had also punched holes into Mistry’s performance over four years and listed Tata Steel Europe, DoCoMo-Tata Tele joint venture and Tata Motors’ Indian operations as “problem companies” where there was no “noticeable improvement in operations” and the situation has worsened with widening losses, increasing debt and declining market share.
Referring to the changes announced in the management roles of the company on November 4, Tata Sons asked its board of group firms and independent directors to keep the interest of the group as priority.
“In light of the developments since November 4, 2016, Tata Sons reiterates that it is crucially important for boards, including independent directors, to consider that their views and positions ensure the future of Tata companies is protected, taking into consideration the interest of all stakeholders,” the statement said.
On November 4, Tata Sons had announced organisational changes bringing in S Padmanabhan as the group human resources head. Besides, former Tata brand custodian under Mistry’s regime Mukund Rajan has been given the responsibility of overseeing operations of the overseas representative offices of Tata Sons in the US, Singapore, Dubai and China.
This is in addition to his existing responsibility of ethics and sustainability.
Harish Bhat, who is responsible for marketing and customer centricity, will henceforth also be responsible for managing the Tata Brand.
The Tata Sons statement comes days after independent directors of IHCL came out in support of Mistry while Tata Chemicals independent directors also showed their support to him.
Tata Sons’ criticism of ind directors ‘unfortunate’: Mistry
Terming Tata Sons’ contention that group companies were “drifting away” under him as “furthest from truth”, ousted chairman Cyrus Mistry on Sunday hit back at Tata Sons calling its criticism of independent directors, revered names in India Inc, as “truly unfortunate”.
“To suggest that ‘ulterior objectives’ and ‘clever strategy’ can sway these eminent names in undertaking their fiduciary duties and discharging the duties mandated by the statute as independent directors is absolutely astonishing and really speaks to how low Tata Sons has unfortunately stooped in their public statements,” a statement from his office said, in a rebuttal to the recent actions of Tata Sons.
Stating that the independent directors whose conduct has been questioned include names like Deepak Parekh, Nusli Wadia and Nadir Godrej, among others, Mistry added that it is “truly unfortunate” that independence of “stalwarts of India Inc” is being questioned.
The statement is a rebuttal to a 9-page open letter issued by Tata Sons in which it had accused Mistry of “trying to gain control of Indian Hotels Company, whose independent directors had sided with the former chairman of Tata Sons.
“He (Mistry) has cleverly ensured over these years that he would be the only Tata Sons representative on the board of IHCL in order to frustrate Tata Sons’ ability to exercise influence and control on IHCL,” the Tata Sons letter had said.
Independent directors at Tata Chemicals have also backed Mistry, which has led Tata Sons initiating action to expel Wadia from its company boards. In its letter, Tata Sons had also alleged that Mistry was trying to gain control of the group’s main companies and regretted its decision to appoint him as chairman four years ago.
It had said the structure of the group has been “consciously dismantled so that now the operating companies are drifting farther away from the promoter company and their major shareholder”.