The Cyrus Mistry and Ratan Tata war broke out almost a month back and the bitterness for each other has only increased with each passing day as both the camps indulge in allegations and counter allegations.
According to this article in The Economist, Ratan Tata needs to get his act right quickly and come out of the mess he created.
“Mr Tata created the mess and it is up to him to resolve it,” The Economist article said. It said Tata, through the trusts, orchestrated the firing of Mistry from the holding company.
As per the report, Mistry never got a free hand to perform his duties at the group companies, as Tata was breathing down his neck from the start.
Recent media reports suggested that Tata group was unhappy over Mistry’s decision to sell some of the Tata Steel’s assets in Europe, and the mis-handling of Tata-DoComo deal that went awry during his period. Also, his decision to slash dividend payments, resulting in lower payout to the group holding company Tata Sons did not help it either.
Last week, the promoter company of the major operating Tata group firms had accused Mistry of betraying trust and trying to seek control of main operating companies of the over $100 billion group.
It had also punched holes into Mistry’s performance over four years and listed Tata Steel Europe, DoCoMo-Tata Tele joint venture and Tata Motors’ Indian operations as “problem companies” where there was no “noticeable improvement in operations” and the situation has worsened with widening losses, increasing debt and declining market share.
As things stand out, Mistry has been removed from the chairmanship positon of Tata Consultancy Services, while the board of Tata Global Beverages’ directors, too, have backed the decision to replace him.
However, Mistry still remains chairman of some of the group’s major companies like Tata Motors and Tata Steel, where Tata Sons does not have majority ownership. Tata Sons has called shareholder meetings at these companies to get Mistry ousted from those boards.
On the other hand, Mistry in his counter allegations had said that most of the troubles at Tata Group companies were due to some reckless decisions of the group taken in the past, and he was only trying to rectify those errors through some tough measures.
