Cyrus Mistry Still Chairman Of Some Companies, Tata Sons Hope He Will Quit

Mumbai: Cyrus Mistry, sacked as Chairman of Tata Sons, the holding company of the $103 billion group, continues to serve as chairman of several group companies even as he engages in a bitter public spat with the Tatas.

Sources said the Tatas hope Mr Mistry will resign from the companies on "moral grounds," after he made what the group has called "unsubstantiated claims and malicious allegations" against it in a blistering five-page email sent to board members that became public.

The group meanwhile is keen to signal that it is business as usual at the country's biggest conglomerate. Tata Steel held a conference call with market analysts yesterday and made clear that changes in the top leadership will not result in any change in strategy or impact plans for the company's European steel business.

Tata Steel has also announced a tie-up with a Canadian iron ore mine as it tries to sooth nerves on the stock markets, where the company's shares have seen a major fall since Mr Mistry's removal was announced.

Analysts say investors don't have much to worry about, but the current situation with Cyrus Mistry continuing to serve as Chairman in some companies can be tricky.

"Because of the way things have happened, a lot of it was undesired and that has rankled many investors. Hopefully these are things that will not turn ugly from here and the spat will end sooner than later," K Subramanyam, Co-Head, Equity Advisory, Altamount Capital said to NDTV.

VK Sharma, Head of Business, Private Client Group, HDFC Securities, who is an investor in Tata Teleservices, said Mr Mistry should step down on his own. "It is going to slow down decision-making so I think it would be proper for Mr Mistry to step down as chairman from these companies."

Cyrus Mistry, 48, remains the chairman of Tata Steel, Tata Motors, Tata Consultancy Services, Indian Hotels, Tata Global Beverages Limited, Tata Chemicals, Tata Industries and Tata Teleservices. He also continues to be a director of Tata Sons and could by law only be removed by shareholders after being given due warning. His family's Shapoorji Pallonji Group, a construction major, owns nearly a fifth of Tata Sons.

On Wednesday, Mr Mistry spent about six hours in Bombay House, the Tata Headquarters in Mumbai, and also chaired a TGBL board meeting. Ratan Tata, who will lead the group till a replacement is found for Mr Mistry, was not at Bombay House when the latter was there.

Cyrus Mistry's email accuses the company of failures of governance that he said had destroyed billions of dollars in shareholder value. He has also alleged inappropriate interference by Ratan Tata, the 78-year-old patriarch who hired him and has come out of retirement to run the business in a caretaker role.

Tata, in an eight-paragraph statement on Thursday, dismissed Mr Mistry's claims.

"The correspondence makes unsubstantiated claims and malicious allegations," Tata Sons said in the statement emailed to reporters a day after Mr Mistry's letter was leaked to the press. "These will be responded to in an appropriate manner," the company said without elaborating, raising the prospect that the war of words could lead to a legal battle.