Mumbai– The ousted Chairman of Tata Sons Cyrus P. Mistry not only indulged in an undignified leak of a confidential letter to the board, but also made malicious allegations, sought to besmirch the group’s image before its 600,000 employees and disregarded its values and ethos, the holding arm of India’s largest industrial house said in a statement on Thursday.
Taking strong exception to the contents of the 49-year-old Mistry’s letter a day earlier, which made its way to the media, Tata Sons also sought to counter the allegations by saying it was he who departed from boardroom norms and that the records, when made public, will prove what the 148-year-old business empire has maintained in this regard.
“It is a matter of deep regret that a communication marked confidential to Tata Sons board members has been made public in an unseemly and undignified manner,” said the statement, issued two days after Mistry was ousted in an unprecedented manner as Tata Sons Chair.
“The correspondence makes unsubstantiated claims and malicious allegations, casting aspersions on the Tata group, the Tata Sons board and several Tata companies and some respected individuals,” said the statement issued by Group Spokesperson Debasis Ray.
“These will be responded to in an appropriate manner.”
Tata Sons took particular offence to Mistry’s alleged departure of the group’s value system and ethics, which it said was adhered to both in the boardroom and by its 600,000 plus employees. “It is unforgivable that Mr. Mistry has attempted to besmirch the image of the group in the eyes of the employees.”
In his letter to the board, Mistry alleged some business decisions taken by the board — where he also claimed being relegated to a lame duck chairman — covering hotels, automobiles, power, telecom and steel — could potentially result in a write down over time of about Rs 118,000 crore ($18 billion).
This came after he was sacked as chairman of Tata Sons on Monday, reinstating Ratan Tata to the post after four years, in an interim capacity.
“The Directors of the Tata Sons board had repeatedly raised queries and concerns on certain business issues, and Trustees of the Tata Trusts were increasingly getting concerned with the growing trust deficit with Mistry, but these were not being addressed. The Tata Sons board, in its collective wisdom, took the decision to replace its Chairman in the manner undertaken,” the statement said.
The $103-billion group of over 100 companies, also said that it was unfortunate that Mistry had overwhelmingly lost the confidence of the board for several factors and that trustees were increasingly getting concerned with the growing trust deficit which was not being addressed.
There was no word from the Shapoorji Pallonji Group — Mistry’s father’s empire that holds 18.4 per cent shares in Tata Sons. They said they were “studying the circumstances” of the removal.
On Thursday, the markets watchdog Securities Exchange Board of India (SEBI) began verifying Mistry’s disclosures to ascertain if there was any breach of corporate governance, violation of listing norms and regulations, or financial and other irregularities, officials said.
The day also saw some of the 29 listed companies of the Tata Group responding to queries from stock exchanges over the allegations made by Mistry. The gist of all the replies was that their financial statements presented a true and fair view of the state of affairs of the company in question.
But several of the group’s shares continued to fall on the Indian markets.
Indian Hotels lost significantly Rs 6.40 or 5.27 per cent, Tata Chemicals lost Rs 10.90 or 1.98 per cent, Tata Motors lost Rs 7.65 or 1.44 per cent, Tata Steel lost Rs 1.75 or 0.44 per cent, Tata Power lost Rs 1.10 or 1.36 per cent, and Voltas lost Rs 3.45 or 0.90 per cent.
But Tata Consultancy Services gained Rs 16.30 or 0.68 per cent.