New Delhi: A day after he was sacked as the chairman of Tata Sons, Cyrus Pallonji Mistry finally broke his silence and expressed shock at his removal while alleging that he was pushed to being a 'lame duck' chairman.
In an email addressed to the Directors of Tata Sons, the ousted chairman levelled series of allegations against Emeritus Chairman Ratan Tata and how he would interfere in decision makings.
Terming his removal as illegal, Mistry said that he was “shocked beyond words at the happenings at the board meeting of October 24, 2016”.
However, Tatas hit back stating that Mistry's removal was not illegal and that it was done as per the articles of the association.
'Was pushed into position of lame duck chairman'
In a five-page letter/mail made available to the media, the ousted chairman of Tata Sons contended that he was pushed in a position of "lame duck" chairman. He also alleged of changes in decision-making process which created alternate power centres in Tata Group.
Mistry further said he was promised a free hand when he was appointed chairman in December 2012 but Articles of Association were modified, changing the rules of engagement between the Tata family trusts and the Board of Tata Sons.
Stating that he inherited problems, he went on to raise corporate governance issues alleging representatives of family trusts, which hold two-thirds of Tata Sons shares, were reduced to "mere postmen" as they left board meetings midway to "obtain instructions from Mr Tata."
Mistry 'shocked' over his 'illegal' removal
In the mail, the ousted chairman also expressed his 'shock' on being sacked as the head of the company and termed it 'illegal'.
"I was shocked beyond words at the happenings at the board meeting of October 24, 2016. Apart from the invalidity and illegality of the business that was conducted, I have to say that the Board of Directors has not covered itself with glory,” Mistry said in the letter.
"To 'replace' your Chairman without so much as a word of explanation and without affording him an opportunity of defending himself, in a summary manner must be unique in the annals of corporate history," he wrote in the email.
'Increased Tata Sons net worth to Rs 42,000 crore from Rs 26,000 crore'
While highlighting the various challenges faced by the company, Mistry also pointed out that, Tata Sons, under his leadership, had grown from strength to strength.
Despite all of the above, during my term, the operating cash flows of the group have grown at 31% compounded per annum, Mistry said in the letter adding that the Tata Group valuation from 2013 to 2016 increased by 14.9% per annum in rupee terms as against the BSE Sensex annual increase of 10.4% over the same period.
The Tata Sons networth has increased from approximately Rs. 26,000 crores to Rs. 42,000 crores, after considering the impairments. This has significantly strengthened our balance sheet, enhancing our ability to absorb further shocks from restructuring in the companies, Mistry added.
Mistry's removal not illegal: Tatas
Hitting back at Cyrus Mistry's allegations, Tatas stated that his removal was not illegal and was done as per the Articles of Association.
The company also called the letter of the ousted chairman which was circulated to the media as a political drama and an emotional outburst.
The company also stated that Mistry was not lame duck chairman as he claimed he was made to be in his letter.
As per media reports, the Tatas called Mistry's letter as a political drama and emotional outburst and asked the ousted Chairman to come out in open about his removal.
This is what happened on Monday and Tuesday
On Monday, October 24th, the corporate world was stunned by the news that Tata Sons had removed Mistry as the chairman of the company and appointed Ratan Tata as the interim chief for four months.
While no clear reason was given, sources said it was in “long-term interest” of the company.
Then taking charge of the company on Tuesday, Ratan Tata inducted two new directors of the company, Jaguar Land Rover CEO Ralf Speth and Tata Consultancy Services (TCS) CEO & MD N Chandrasekaran.
He also called on the CEOs of group firms and asked them to focus on their business and not be distracted by the change in top leadership.
The company also filed a caveat in the Supreme Court, Bombay High Court and the National Company Law Tribunal against Cyrus Mistry moving for relief against his ouster as chairman.
Filing the caveat, Tata Sons and a Tata Trust, among others, said that they should be heard before grant of any relief to the ousted chairman.
Meanwhile, amidst reports that Cyrus Mistry would also filed a caveat against the Tatas, his office denied any such move from the company.
A statement from Mistry's office said, "A caveat is a notice filed by a party fearing legal action seeking notice before action. Tatas have filed caveats seeking notice from Cyrus Mistry fearing legal action. Cyrus has not filed any caveats. He has already made a statement that such concerns are misplaced at this stage."