Mistry misled Chairman Selection Committee in 2011: Tata Sons
Mumbai, Dec 11 In a fresh salvo fired in their ongoing corporate war, Tata Sons on Sunday accused former Chairman Cyrus Mistry of misleading the committee set up in 2011 for selecting a Chairman to succeed Ratan Tata and said Mistry's retraction from commitments created grave concerns on his ability to lead the group.
"Cyrus Mistry misled the Selection Committee set up in 2011 for selecting a Chairman of Tata Sons to succeed Ratan Tata, by making lofty statements about his plans for the Tata Group and more importantly indicated an elaborate management structure for managing the Tata Group," Tata Sons said in a statement.
"After waiting for a period of four years, almost none of these management structures and plans have been given effect to. Clearly, in our opinion, the Selection Committee was misled in its choice of Mistry," it said.
Tatas further alleged that its ex-Chairman also didn't distance himself from his family enterprise Shapoorji Pallonji & Co as was promised.
"Mistry did not distance himself from his family enterprise Shapoorji Pallonji & Co as promised. Mistry's retraction from commitments created grave concern on his ability to lead Tata Group devoid of personal conflicts and put to risk high standards of self philosophy," it said.
The company said that dividend income (other than from Tata Consultancy Services) declined continuously and staff costs more than doubled during Mistry's tenure as Tata Sons Chairman which commenced in December 2012.
The holding company said it is compelled to propose the removal of Mistry as the Chairman and Director of all Tata companies by convening Extraordinary General Meetings of shareholders that have been scheduled for later this month.
An increasingly bitter corporate war has erupted after Mistry's abrupt ouster as Tata Sons Chairman on October 24, nearly four years after he took over from Ratan Tata, who has been re-appointed as interim Chairman.
Tata Sons also accused Mistry of taking advantage of being given a free hand to weaken management structures and gradually concentrating powers and authority, systematically diluting representation of Tata Sons on boards.
"Mistry claimed he wasn't given 'free hand'. Ironically in our view, it was this 'free hand' and trust in him that he took advantage of," the statement said.
"Mistry has gradually over the past three/four years concentrated all power and authority only in his own hands as Chairman in all the major Tata operating companies and gone about systematically diluting the representation of Tata Sons on the Boards of various Tata Companies," it added.