After Cyrus Mistry’s ouster from Tata Sons, the interim Chairman Ratan Tata brought back some of his trusted lieutenants to help him deal with the aftermath. One such close aide is Prasad Menon who had earlier retired as the Chairman of the Board of Tata Singapore Airlines Joint Venture - Vistara.

In his first interaction since making a comeback to the Tata group, Menon spoke to BusinessLine about the controversy around Mistry and how it has impacted the group.

It’s been more than a month since the controversy broke out. How is this impacting the Tata organisation?

A disturbance like this in any other company would have completely broken the morale of the workforce. But in Tatas it hasn't. While people are understandably concerned and worried, there is no change in the intrinsic values, there is no change in fundamental objectives. It could have easily derailed the company. But it hasn’t. Employees have just said - okay there is a change in the top but it doesn’t change the fundamentals of the group.

On hindsight, could this have been handled differently? Maybe Tatas should have waited till April when Cyrus Mistry’s contract was coming to an end and then give him an honourable exit.

Knowing Tata, he is not an impulsive decision maker. I have seen some comments that he is going old. I can tell you that apart from having a hearing problem he is as sharp as ever. He is also not a person who would take precipitative action without thinking through. These are the two things that make me feel that whatever was done was done with due thought.

Do you think there is a need to be transparent about some of the allegations made by Mistry? Why not make public the documents related to board meetings or the decision-making process to counter these allegations?.

I don’t think there’s any need. But a crisis like this always has lessons. But there is unnecessary raising issues of governance and transparency. A year ago, was there any issues on transparency or lack of openness, or lack of governance? I can say that in my experience this group has been open, independent directors have the freedom. I haven’t seen any lack of transparency.

There have been allegations against the functioning of Tata Trust and the control it has on profitable business. Would you be open to scrutiny?

I don’t want to engage in allegations and counter allegations but to my mind, Tata Trust have never tried to control the business. They are the largest shareholders and they have given their views on what needs to be done. There is no ground to say that the trusts are running this business. There are two different Chairmen and it will continue to be so in the future. There are clear agreements and understandings on how to work without any interference.

The fight has no doubt had an impact on brand Tata. Is that a worry?

There has been some impact. The persons involved (Mistry camp), after this is over, should think about what the damage they have done. The organisation will recover no doubt, but hopefully after this is over they (Mistry camp) must think about this.

Would you have told Mistry to react differently for the sake of the organisation?

I wouldn’t tell him anything. Wrong time for anyone to talk. All I would say is that I wish the response (from Mistry) would have been different. This is a fantastic organisation; so don’t harm it.

So, he should have accepted and moved on?

I am not saying that. I am no one to say how a person should have responded but I wish the response would have been more measured. Because everyone should remember, including us, that this is an organisation which is iconic. This country needs such organisations. People look up to it.

Mistry has raised several issues around lack of ethics, governance, processes. How do you respond?

It is not difficult for anyone, even in the greatest of companies, to pick things out of context and say there is a problem. Of course there are problems that every company faces and those are discussed openly. So we also discussed all these issues in the respective companies. It’s not something that someone has suddenly discovered.

In your assessment, after all this is over will there be any changes within the Tata group so that it can get back to where it was before all this happened?

I am sure there will be some thinking around this but it is a little early. Any crisis gives you lessons. Every organisation is a sum of its personalities, individuals and relationships. If everyone remembers the values with which the organisation works, we will find a way to go back where we were. And I have no doubt that the Tata group will bounce back.

The group seems to be divided. How do you deal with this?

In any organisation, even with little turmoil you will find people torn one way or the other. But what we have to look at is has that disturbance affected them radically, has it affected their work, has it taken them away from the path of what they are doing. The answer is No. It hasn't. And that's what matters. Its business as usual.

In the last three EGMs, some of public institutions abstained. Do you think they should take a stand for better clarity?

I can't say. But let's see how it goes. I don’t think what’s happened in the last EGM is necessarily an indication of how it will be in the future.

The next EGMs may not be easy for Tata group because of the lower shareholding. How will you convince non promoter shareholders to back you?

Mr Ratan Tata’s letter is very clear. This is not about individuals, this is about organiation, the need for stability and the need to have right kind of leadership to guide this company. Many of the shareholders have spoken that as far as they are concerned its Tata- its a Tata group company. If there is a disturbance they know there will be a correction. Their faith on the group in the past will continue to guide them.

What is the status of selection of new Chairman?

I know that the selection committee has met three times. They have shortlisted the names, I am not privy to the names. I am confident that we will have a new chairman soon.

Are you in the reckoning for the top job?

No. I am just a passing cloud. I had retired and I will retire again.

Do you think it will be an internal candidate?

Not necessarily. I am confident We will get external candidates too.

Last time also the committee looked for external candidates and then decided on Mistry. Will that be playing on their minds?

It must be on their minds but I don’t think that should stop them from getting excellent candidates.

Personally, what is your mandate?

I have just come to help Mr Tata in whatever I can.

There have been attacks on Ratan Tata as well. How is that being taken?

It's unfortunate. I think we should leave that aside. We should look at the organisation and tweak if necessary. It should not be done now. There's too much of noise. Let the EGM finish, let things settle.

Amid all this, what is being done about the troubled hotspots within the group?

They are being grappled with. I have no doubt that many of them will be resolved or in the way to be resolved. In the next one year, there will be some resolution whether its Nano or telecom.

Any regrets in the way this has played out?

For me the only the unfortunate part is the public spat. That is the biggest disappointment and wish it hadn’t happened.

Related Topics
comment COMMENT NOW