Miffed Over His Sudden Removal, Cyrus Mistry Blames Ratan Tata For ‘Constant Interference’

5:50 pm 26 Oct, 2016


Miffed and shocked over his sudden removal chairman of Tata Group, Cyrus Mistry has written an email to Tata Sons Board members and blamed that he faced constant interference by his predecessor, Ratan Tata, to the point that he was pushed into becoming a “lame duck” chairman.

dna

dna

In his email he has said that the group may face 1.18 trillion rupees ($18 billion) in writedowns because of five unprofitable businesses he inherited.

Mistry gave an example of Tata Nano, which was a severely loss making enterprise that should be immediately shut down. He claimed that for emotional reasons alone he was kept away from this crucial decision.

newsmobile

newsmobile

He also defended himself by saying that he had inherited a debt-laden enterprise saddled with losses. In particular, he blamed Indian Hotels Co., Tata Motors Ltd.’s passenger-vehicle operations, Tata Steel Ltd.’s European business, as well as part of the group’s power unit and its telecommunications subsidiary.

Despite plowing 1.96 trillion rupees into those units, they still face challenges and realistically assessing their fair value could result in writing down about 1.18 trillion rupees over time, he wrote.

businessstandard

businessstandard

The former chairman also blamed Tata for problems at Indian Hotels, which runs the Taj chain. Mistry said that the unit had acquired a hotel in Mumbai at a highly inflated price that had forced the company to write down nearly its entire net worth.

businessline

businessline


Mistry had described his removal as “unprecedented” in India, saying he was ‘shocked’ at the manner in which he was removed. Mistry claimed he had not been given a chance to defend himself before being ousted. However he said he was not considering legal options at this stage.

However, in an interview to a media channel, V.R. Mehta, a trustee of the group said that Mistry had breached the ethics of the group. Tata Group’s poor financials were the reason behind Mistry’s removal, he said.

quartz

quartz

After removal of Cyrus Mistry, Ratan Tata took charge as the interim chairman of Tata Sons at Bombay House and addressed the managing directors and senior leaders of companies in the group. He asked them to focus on leadership in their respective markets and enhance returns to shareholders.

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