Mumbai, Dec 11 n a fresh salvo fired in the ongoing corporate corporate war, Tata Sons on Sunday accused former Chairman Cyrus Mistry of misleading the selection committee set up in 2011 for selecting a Chairman to succeed Ratan Tata, even as Mistry termed the allegations lies and a “regurgitation of fake innuendo”.
In a separate statement on Sunday, Mistry also alleged that Vijai Singh, who had chaired the Tata Sons board meeting in which Mistry was voted out, was concocting theories to defend his role in Mistry’s ouster.
“Cyrus Mistry misled the Selection Committee set up in 2011 for selecting a Chairman of Tata Sons to succeed Ratan Tata, by making lofty statements about his plans for the Tata Group and more importantly indicated an elaborate management structure for managing the Tata Group,” Tata Sons said in a statement.
“After waiting for a period of four years, almost none of these management structures and plans have been given effect to. Clearly, in our opinion, the Selection Committee was misled in its choice of Mistry,” it said.
Tatas further alleged that Mistry also didn’t distance himself from his family enterprise.
“Mistry did not distance himself from his family enterprise Shapoorji Pallonji & Co as promised. Mistry’s retraction from commitments created grave concern on his ability to lead Tata Group devoid of personal conflicts and put to risk high standards of self philosophy,” it said.
The company said that dividend income (other than from Tata Consultancy Services) declined continuously and staff costs more than doubled during Mistry’s tenure as Tata Sons chairman.
The holding company said it is compelled to propose the removal of Mistry as the chairman and director of all Tata Companies by convening Extraordinary General Meetings of shareholders that have been scheduled for later this month.
An increasingly bitter corporate war has erupted after Mistry’s abrupt ouster as Tata Sons chairman on October 24, nearly four years in December 2012 after he took over from Ratan Tata, who has been re-appointed as an interim chairman.
Tata Sons also accused Mistry of taking advantage of being given a free hand to weaken management structures and gradually concentrating powers and authority, systematically diluting representation of Tata Sons on boards.
“Mistry claimed he wasn’t given ‘free hand’. Ironically in our view, it was this ‘free hand’ and trust in him that he took advantage of,” the statement said.
“Mistry has gradually over the past three/four years concentrated all power and authority only in his own hands as Chairman in all the major Tata operating companies and gone about systematically diluting the representation of Tata Sons on the Boards of various Tata Companies,” it added.
Describing these allegations as “lies”, Mistry in a release here on Sunday said there was no misrepresentation to the Chairman Selection Committee that appointed him.
“On the contrary, if Tata Sons had any point at all to make it would have complied with law to form a Committee now to logically present charges against Cyrus Mistry,” said a statement from his office.
“To say that Cyrus Mistry concentrated power in his hands across companies is meaningless since Mr. Mistry expanded the oversight over his work by focusing on better board effectiveness and getting his work overseen by over 50 independent directors,” it added.
On the issue of conflict of interest regarding the Shapoorji Pallonji (SP) Group, Mistry said he did not sit on a single Board of the SP group other than his family investment company.
On Singh, who had chaired the Tata Sons board meeting in which Mistry was voted out and had described Mistry’s claims about the Tata Trusts as “travesty” and said that no stage did Tata Trusts attempt to run Tata Sons or take “undue interest” in any commercial matters, Mistry said: “It’s amusing to see Vijai Singh concoct theories to defend his role in Ratan Tata’s conspiracy to replace Mr. Cyrus Mistry.
“To understand the true motives of Vija Singh’s statements, it is important to understand his track record.”