Cyrus Mistry removed as board lost confidence in him: Ratan Tata

Mumbai: Ahead of EGMs of six Tata group firms called to remove Cyrus Mistry as director, Tata Sons interim Chairman Ratan Tata on Wednesday told shareholders that the continued presence of the ousted executive in respective boards is a serious "disruptive influence" and can make the companies "dysfunctional".

In a letter to the shareholders seeking their support to the special resolution moved by Tata Sons to remove Mistry as director, Tata said Mistry was removed as the Chairman as Tata Sons board lost confidence in him and his ability to lead the conglomerate.

He also said the "deliberated action" to remove Mistry by the Tata Sons board was taken after relationship with him steadily deteriorated and "several attempts to remediate went unheeded".

Tata said Mistry was appointed as a director of various Tata group companies only as a corollary to his being the Chairman of Tata Sons.

"The right step would have been for him to resign as director. Unfortunately, he has not yet done so and his continued presence as a director is a serious disruptive influence on these company boards, which can make the company dysfunctional, particularly given his open hostility towards the primary promoter, Tata Sons," Tata wrote.

He further said Mistry was offered an opportunity to step down voluntarily from the Chairman position, which he rejected.

Justifying the move to sack Mistry, Tata said: "...the Board of Tata Sons lost confidence in him and in his ability to lead the Tata group in the future."

This deliberated action by the Tata Sons board was taken after several attempts to remediate went unheeded.

"As a final step he was offered an opportunity to step down voluntarily from the Chairman position, which he rejected and said that it should be taken up at the Board," Tata said, adding this was done and Mistry was replaced.

Following special resolution moved by Tata Sons to remove Mistry as director, TCS has called an EGM on December 13, Indian Hotels Co Ltd on December 20, Tata Steel on December 21, Tata Motors on December 22, Tata Chemicals on December 23 and Tata Power on December 26.

There were no immediate comments from the Mistry camp.

Terming Ratan Tata's letter to shareholders of Tata companies a combination "misrepresentation and convenient mischaracterisation", ousted Tata Sons Chairman Cyrus Mistry hit back saying the veteran industrialist is lying.

In a statement, Mistry's office also denied that his sacking was preceded by various attempts to discuss with him.

"Mr Ratan Tata does not speak the truth. His claim that Mr Mistry's treatment at Tata Sons Board on that day was well-deliberated and was preceded by various attempts to discuss with Mr. Mistry is a lie," the statement said.

It claimed that "five minutes before the Board Meeting scheduled on October 24, 2016, Mr. Nitin Nohria and Mr. Tata came to Mr. Mistry's room and told him that on that very morning, the trustees had taken a decision to replace Mr. Mistry ostensibly because Mr. Tata could not get along with him."

It further said "the fait accompli presented to Mr. Mistry was that he could leave or face a sacking at the Board

Meeting scheduled in the next five minutes."

At the meeting, every legal procedure was "thrown to the wind and the blemish-less history of Tata Sons' was destroyed", it added.

Refuting Tata's claims that there were several attempts to remediate, it said: "Neither was there any deliberation nor was there any prior attempt at remediation as Mr. Ratan Tata now seeks to make out."

Tata's "false statements" are borne out by the fact that just weeks before this event, the Board had accepted the

Nomination and Remuneration Committee's endorsement of superlative performance by Mistry and his team, the statement said. "It is evident that Mr. Mistry's professional conduct in the Chairman's Office did not suit the requirements of Mr. Ratan Tata," it said.

The statement claimed that Tata has "completely failed to offer a single reason for his inexplicable actions"  of removing Mistry as Chairman of Tata Sons.