On October 24, when Tata Group Chairman left to attend the board meeting, little did he know that he was going to face what could possibly be the toughest day of his life. What he thought was a normal meeting had a hidden agenda that he was unaware of. In fact, most of the other members were also ignorant of what was going to happen in the meeting apart from the business listed on the agenda. He had no idea that he was going to be fired. But that is exactly what happened. Out of nine members, two abstained while the others voted in favor of the motion supporting his ouster. Mistry, as the ninth member, did not take part in the process. According to sources, most of the members were also taken by surprise. It is believed that they were individually called before the meeting and the decision was conveyed to them.
It is not that Mistry had been unaware of the rumblings within the company. He was also aware that some of the old guard had been rubbed the wrong way. However, something as unprecedented as his immediate sacking was beyond his wildest dreams. It seems that he believed that the board members who had stood with him and his decisions, would not leave his side if it came to the worst. He was also confident of prevailing over other board members and that he would be able to present his case in the best possible manner. However, he could never anticipate the suddenness of the decision and its execution.
According to an insider, before the meeting started, Mistry was asked to take the route of honorable exit. However, his confidence in his own performance led him to believe that he would be able to handle the situation. However, when the item was brought before the chair, listed under “Any other Item” category he was completely taken by surprise: it was a guillotine. Standard procedures were not followed and rules of fair play seem to have been thwarted. He was summarily judged and executed on the spot, much like kangaroo courts. Taking the surreptitious route doesn’t sit well with the Tata culture and its past. The sacking has set a precedent that could have well been avoided. As a matter of propriety, a decision of such import should never be taken in this manner. It provides fodder to people wanting to label it as a conspiracy. Anyway, what was the need for the sudden termination? Only the very close would ever get to know about it. There doesn’t appear to be any harm in having Mistry alerted to the impending decision and or at least making him mentally prepared. Consequently, media reports appear to be correct with regard to acrimonious scenes inside the boardroom.
In retrospect, it seems rather shortsighted of Mistry to expect that the other board members, who had worked closely with Ratan Tata in the past would break from him. And by the time the agenda was placed on the table, the option of honorable exit had also evaporated by then.
According to reports, Mistry’s ouster had little to do with his performance. Independent experts are of the view that his policies were good for the long term. But the people who mattered obviously thought otherwise, most of whom had other things on their minds than business.
What happened later is in the public domain: Tata Sons sent out a press release after the meeting, declaring the Mistry’s removal and Ratan Tata’s reinstatement as interim chief. “The board in collective wisdom and on recommendations of principle shareholders took a decision to change for long-term of interests of Tata Sons and Tata Group,” a Tata Sons spokesperson said.
Mistry, no doubt, is smarting under the blow and has vowed to take remedial actions but all of that seem hardly plausible now. Anyway, Mistry’s abrupt ouster is a snappy break from the past and sets unsettling precedents for the Tata Group.