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Cyrus Mistry, the ousted chairman of Tata Sons, was working on a deal with Vodafone for Tata Teleservices Ltd (TTSL) and was close to sealing it, according to Nirmalya Kumar, a former member of Tata Sons’ Group Executive Council (GEC) member. He also told BusinessLine that Nano may not have a chance of survival given that the current Chairman of Tata Sons, N Chadrasekaran, is not emotional while taking decisions.
“Mistry was working on a deal wherein Tata Sky, Tata Communications and TTSL would be bundled together and transferred to Vodafone in exchange for a substantial stake, but not a majority stake in Vodafone India. Following the deal, we would have had a company that would have been Number 1 in direct-to-home and enterprise business, and Number 2 in telephony,” Kumar told BusinessLine .
“Following Mistry’s exit, Vodafone was not interested in the deal and the only buyer in the town was Airtel and I don’t think Chandra (Tata Sons Chairman N Chandrasekaran), had many options. The unfortunate part of the Airtel deal was it was announced ahead of Diwali, which is not good for employees,” Kumar said, adding that he does not have any inside information but was basing his comments on press reports.
“They (Tatas) did the deal because they were losing money. So for them, giving it away for free was better than keeping it, as keeping it would have mean to pay everyday for losses,” he said. On October 12, TTSL merged its consumer mobile businesses with Bharti Airtel in a cashless deal.
On Chandra’s performance so far, Kumar said: “What I like about Chandra, based on the interviews I have read, that he is stingy with capital, he will shut down businesses that are not profitable and the ones that don’t have any chances of revival. He is not going to be emotional in making decisions. I suspect that Nano may not have any chance of survival.” Kumar is a Lee Kong Chian Professor of Marketing at Singapore Management University & Distinguished Fellow at INSEAD Emerging Markets.
Mistry, in making his team, wanted a balance between insiders and outsiders, while Chandra has decided to go with external talent. Chandra is recruiting outsiders who he knew from the past. “Personally, I think that’s the strongest strategy. If it were me, I would have followed Chandra’s strategy,” Kumar said
Kumar, who wrote a blog last week giving details of how Mistry was sacked, feels he is still not far away from the events to write a book. If ever he writes, it will have the events of the issue and lessons from it for corporate governance and Indian business.
“If ever I write a book, it’s not going to be a kiss and tell book,” he added.
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