Cyrus Mistry Fully Empowered To Lead, But Lost Confidence of Board: Tatas 

Mumbai: Hitting out at Cyrus Mistry for making 'unsubstantiated claims and malicious allegations', Tata Sons on Thursday said the former chairman was fully empowered to lead the group and its companies, but had overwhelmingly lost the confidence of board members. With the contents of Mistry's letter, which he wrote to its Board members after being sacked, becoming public, Tata Sons regretted that a communication marked confidential to Tata Sons board members has been made public in an unseemly and undignified manner.

The promoter company of the major Tata group companies also alleged that Mistry's tenure was marked by repeated departures from the culture and ethos of the group.

"The correspondence makes unsubstantiated claims and malicious allegations, casting aspersions on the Tata group, the Tata Sons board and several Tata group companies and some respected individuals. These will be responded to in an appropriate manner," Tata Sons said in a statement. The company also rubbished Mistry's claims that he was made a 'lame duck' Chairman.

"As the Executive Chairman, he was fully empowered to lead the group and its companies. It is unfortunate that it is only on his removal that allegations and misrepresentation of facts are being made about business decisions that the former Chairman was party to for over a decade in different capacities," the statement said.

The Tata Sons board gives its Chairman complete autonomy to manage opportunities and challenges. However, the tenure of the former Chairman was marked by repeated departures from the culture and ethos of the group, it added. It is unfortunate that Mistry had overwhelmingly lost the confidence of the Members of the Board of Directors for a combination of several factors, Tata Sons said.

Stating that Mistry has been on the Board of the company since 2006 and was appointed Deputy Chairman in November 2011 and formally appointed Chairman on December 28, 2012, Tata Sons said he would be fully familiar with the culture, ethos, governance structure, financial and operational imperatives of the group as well as its various companies. Reacting strongly to several allegations made by Mistry in his letter to the Board members, Tata Sons said: It is unforgivable that Mistry has attempted to besmirch the image of the group in the eyes of the employees.

Giving an account on why Mistry was replaced, the company said: The Directors of the Tata Sons board had repeatedly raised queries and concerns on certain business issues, and Trustees of the Tata Trusts were increasingly getting concerned with the growing trust deficit with Mistry, but these were not being addressed. The Tata Sons board, in its collective wisdom, took the decision to replace its Chairman in the manner undertaken, it added.

Tata Sons described Mistry's letter as an effort to level accusations against individuals and company boards for ignoring corporate governance norms that were supposedly upheld by him while in office. It further asserted that there was a multitude of records to show that the allegations made by him were unwarranted. And these records will be duly disclosed before appropriate forums, if and when necessary, sufficiently justifying the decision made by responsible Boards of Directors, of Tata Sons and its group companies, the statement added.

Giving an account on why Mistry was replaced, the company said: The Directors of the Tata Sons board had repeatedly raised queries and concerns on certain business issues, and Trustees of the Tata Trusts were increasingly getting concerned with the growing trust deficit with Mistry, but these were not being addressed. The Tata Sons board, in its collective wisdom, took the decision to replace its Chairman in the manner undertaken, it added.

Tata Steel and Indian Hotels on Thursday said they have always made all relevant disclosures and have no further comments to offer following comments made by ousted Tata Group chairman Cyrus Mistry that Tata group firms could face a potential $18 billion writedown.

Defending the decision of the board, the company said its directors were several eminent personalities from all walks of life. This is not a group of people who one would expect to act without exercising proper judgement in the best interests of the entities they sit on the boards of, it said.

Tata Group Makes All Relevant Disclosures

Tata Steel and Indian Hotels on Thursday said they have always made all relevant disclosures and have no further comments to offer following comments made by ousted Tata Group chairman Cyrus Mistry that Tata group firms could face a potential $18 billion writedown. The financial statements of the company are prepared on a going concern basis and present a true and fair view of the state of affairs of the company. As part of preparation of financial statements, the value-in-use of the assets of the company is tested for impairment as per accounting standards, Tata Steel and Indian Hotels Company said in a filing to BSE.

These comments come against the backdrop of the high-profile Tata-Mistry case, with stock exchanges seeking clarifications from various group companies, including Tata Steel and Tata Power, after purported disclosure of around $18-billion possible writedown at the firms. The financial statements are considered by our audit committee and unanimously approved by the chairman and the board of directors of the company. The company has currently nothing further to comment or disclose, Indian Hotels said. In an explosive communication to Tata Sons board members, Mistry levelled a series of allegations against Ratan Tata and contended that he was pushed into a position of lame duck chairman, and changes in the decision-making process created alternative power centres in the Tata group.

These comments come against the backdrop of the high-profile Tata-Mistry case, with stock exchanges seeking clarifications from various group companies, including Tata Steel and Tata Power, after purported disclosure of around $18-billion possible writedown at the firms. The financial statements are considered by our audit committee and unanimously approved by the chairman and the board of directors of the company. The company has currently nothing further to comment or disclose, Indian Hotels said.

He warned that the salt-to-software conglomerate may face writedowns because of five unprofitable businesses he inherited. Mistry further said he inherited a debt-laden enterprise saddled with losses and went on to single out Indian Hotels Co, passenger-vehicle operations of Tata Motors, European operations of Tata Steel, part of the group's power unit and its telecommunications subsidiary as legacy hotspots.

Source: PTI