Cyrus Mistry's confidential letter to the Tata Sons board had been leaked to the media.
Highlights
- Cyrus Mistry's email says removal as Chairman was illegal
- Tata Group responds, says his claims are invalid
- Mistry was 'fully empowered' as chair, leak is 'unforgivable': Tata Sons
Cyrus Mistry, was "fully empowered" to run India's largest conglomerate Tata Sons has said in a statement today amid international focus on the abrupt removal of its 48-year-old Chairman. Refuting Mr Mistry's remarks that his authority was undermined by the constant interference of Ratan Tata, the group's patriarch,
Tata Sons says that Mr Mistry "was party to for over a decade in different capacities" to the decisions that he has flagged as problematic in a lengthy e-mail to the board of the group.
Mr Mistry was sacked on Monday. His family own The Shapoorji Pallonji Group, which is among the largest stake-holders of the $103-billion Tata Group.
On Tuesday, he wrote a five-page note to board members, which was leaked to the press yesterday. Mr Mistry says he "is shocked beyond words" at the manner in which he was removed, a process that he described as illegal. He has been replaced by Mr Tata, whom he took over from as Chairman in late 2012.
In his note, Mr Mistry talks of the many challenges he confronted, including Mr Tata's alleged reneging on a promise to be hands-off. He red-cards five loss-making sectors or "legacy hotspots", which, he says, could reduce the group's value by 18 billion dollars if re-assessed. He pins the Tata Nano's survival on "emotional reasons" and suggests Mr Tata has a vested interest in keeping it from shutting down, and he alleges the board was reluctant to take action after 22 crores worth of financial irregularities were discovered on its
Air Asia airline venture.
"It is a matter of deep regret that a communication marked confidential to Tata Sons board members has been made public in an unseemly and undignified manner," Tata Sons has retaliated today, saying Mr Mistry's attempt to stain the company's image is "unforgivable" and that it will release documents at "appropriate forums" to prove his claims are baseless.
Mr Tata's close advisors have said that Mr Mistry lost the board's confidence partly because he moved to sell foreign assets that had been acquired by his predecessor like the company's UK steel operation. They also say there was a "mismatch" of values between Mr Mistry and the group.