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Mistry Defends Himself In Letter To Shareholders
Mistry stresses the need for governance reforms at Tata Sons, the Tata trusts, and Tata group companies in order to 'reclaim the glory at Tata group'
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Ousted Tata Sons chairman Cyrus Mistry has reached out to shareholders of six Tata group companies, defending his position and laying out reasons why he should not be removed as director at their upcoming shareholder meetings.
In a bitter boardroom coup Mistry was removed as chairman of Tata Sons in October and patriarch Ratan Tata has returned to the helm temporarily. A very public power struggle has since ensued between Tata Sons and Mistry.
Tata Sons, the group holding company, has called shareholder meetings at Tata companies where Mistry still sits on the board, including Tata Motors and Tata Consultancy Services, in an attempt to drive him out of the $100 billion steel-to-software conglomerate.
Mistry, in a notice to shareholders of Tata group companies dated December 5 and seen by Reuters, stressed the need for governance reforms at Tata Sons, the Tata trusts, and Tata group companies in order to "reclaim the glory at Tata group".
Mistry's appeal for reform stems largely from Tata Sons' byzantine ownership structure. The Tata trusts, a group of public charities, own two thirds of Tata Sons, which in turn exerts control over dozens of group companies that make up the Tata empire.
"Without governance reforms, without checks and balances and without accountability for conduct of the trustees, serious erosion for you as members of your company is inexorable," Mistry said in his note.
"The Tata group is no one's personal fiefdom: it does not belong to any individual, not to the trustees of the Tata trusts, not to the Tata Sons directors, and not to the directors of the operating companies," he said.
Tata Sons in a statement "strongly and categorically" refuted claims made by Mistry in his notice on Monday and said that shareholders are qualified to "see through the smokescreen of baseless allegations being passed off as an appeal."
Mistry's statements since his ouster have caused the group enormous damage and caused considerable financial loss to all shareholders, Tata Sons said, referring to a drop in the share prices of Tata companies since October.
Mistry has also launched a website, www.cyrusforgovernance.com, that archives statements made by him since his ouster, largely focused on governance issues.
When he was ousted, Tata Sons criticised Mistry's performance and accused him of, among other things, being responsible for rising expenses and impairment provisions and falling dividends, claims Mistry has denied.
Mistry, in his note to shareholders, highlighted his efforts in making risk management processes more robust, fixing some of the legacy hot spots that were a drain on resources and also investing in future-proofing the group's profitable businesses.
"I was determined to make the Tata group stronger and resilient to endure future challenges ... My focus was on reinforcing the institutional brand "Tata"," he said, adding that more than $25 billion was invested for growth across Tata group companies in the last three years.
"The entire Tata group, as indeed your company, is now at an inflection point. The actions we collectively take now, is what will define the Tata Group's future," Mistry said.