I was made a ‘lame duck’ chairman: Cyrus Mistry

MUMBAI (INDIA): Sacked unceremoniously, a “shocked” Cyrus Mistry has 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 “alternate power centres” in Tata Group.nnIn an explosive confidential email to Tata Sons board members, he accused them of replacing him as Chairman of India’s largest conglomerate without so much as a word of explanation and without affording him an opportunity of defending himself “in a summary manner” that must be “unique in the annals of corporate history”.nn”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.nn”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 on October 25 which was circulated widely to the media on Wednesday.nnAttempts to get a response from Tata Sons on Mistry’s charges failed.nnMistry said he was promised a “free hand” when he was appointed Chairman in December, 2012 but the Articles of Association were modified, changing the rules of engagement between the Tata family trusts and the Board of Tata Sons.nnStating 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”.nnIn clear signs that not all was well between him and Tata, he highlighted his predecessor’s loss-making Nano car project that consistently lost money but could not be shut down for “emotional reasons” and because it would have stopped the supply of Nano gliders to an electric car-making entity where Tata had stakes.nnHe alleged that it was Tata who forced the Group to foray into the aviation sector by making him a ‘fait accompli’ to joining hands with Air Asia and Singapore Airlines and making capital infusion higher than initial commitment.nnAlso, “ethical concerns” had been raised over certain transactions and a “recent forensic investigation revealed fraudulent transactions of Rs 22 crore involving non-existent parties in India and Singapore,” he wrote.nnHe warned that the salt-to-software giant may face INR 1.18 lakh crore in writedowns because of five unprofitable businesses he inherited.nnDefending his record, Mistry 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 and part of the group’s power unit and its telecommunications subsidiary as “legacy hotspots”.nnHe said the “suddenness” of the action, and the “lack of explanation” had led to all manners of speculation and had done “immeasurable” harm to his reputation as well as that of Tata Group.nn”I cannot believe that I was removed on grounds of non-performance,” he said, going on to point at two directors, who voted for his removal, only recently lauding and commending his performance.nnSource: Press Trust of India