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Face-off: Mistry defends DoCoMo call; Ratan terms sacking essential

| Updated on: Nov 01, 2016
Ratan and Mistry

Ratan and Mistry

mistry_3057656f

mistry_3057656f

Ousted chairman terms as baseless insinuations of mishandling dispute; patriarch says change of guard was well considered

The war of words between the Tata group and Cyrus Mistry showed no signs of abating with both sides upping the ante on Tuesday.

While Mistry said the insinuations that the dispute with NTT DoCoMo was mishandled under his watch was baseless and mischievous, several Tata group companies dismissed allegations of flawed decision-making by the ousted Chairman in his letter to the board. Further, in a note to Tata Group staff, Ratan Tata said the decision to remove Mistry was difficult but essential for the future success of the Group.

Alleged mishandling of the dispute with NTT DoCoMo is widely believed to be one of the reasons for Mistry’s forced exit. However, a statement issued by Mistry’s office said the suggestion that Ratan Tata and the trustees would not have approved of the manner in which the litigation was conducted is contrary to what transpired.

“Ratan Tata and N.A. Soonawala, Trustee, were kept informed and they participated in separate meetings held with Mr Mistry. At all times Ratan Tata and Soonawala concurred and approved the course of action adopted by Tatas and as advised by legal counsel,” the statement said. The dispute is over payment of $1.17 billion to NTT DoCoMo for its stake in Tata Televentures. Under an earlier agreement, Tatas had agreed to pay the money to the Japanese company. However, a new law governing FDI prevented Tatas from paying a pre-determined value for the stake held by NTT DoCoMo. The trouble started after DoCoMo got a ruling from a London arbitration tribunal asking Tatas to pay the amount. Tatas filed an appeal with the Delhi High Court.

“To suggest that Mr Mistry acted on his own, or contrary to “Tata values”, or without the knowledge and/or concurrence of Ratan Tata and Soonawala is as false as it is mischievous,” Mistry’s office added.

This comes even as several Tata group entities refuted claims made by Mistry in his five-page letter to the board of Tata Sons. Tata Chemicals, in reply to clarification sought by stock exchanges, said that its risk management committee reviewed the UK and Kenya operations regularly.

“Major restructuring activities undertaken at the UK and Kenya operations have started showing positive results in these entities in recent times,” the company said refuting Mistry’s claims that the firm still needs to take tough decisions on its operations in the UK and Kenya.

Indian Hotels said the board and a committee constituted by it have reviewed the decisions; all appropriate disclosures have beem made. Mistry had said Indian Hotels had made several flawed decisions due to which IHCL has had to write down nearly its entire net worth over the past three years.

The spat between the two power centres has also seen several high profile exits over the last one week. More names were added to that list on Tuesday. Nirmalya Kumar, Non-Executive Director, resigned from the board of Tata Chemical even as Indian Hotels confirmed that NS Rajan has resigned as a Non-Executive Director of the company. Kumar, Rajan and Madhu Kannan had earlier quit the Group Executive Committee. Noted lawyer Darius Khambata has also resigned as a trustee at Sir Dorabji Tata Trust.

Ramadorai quits NSDC Meanwhile, the buzz around who will be the next Chairman of Tata Sons grew louder after S Ramadorai resigned as the Chairman of National Skill Development Agency and also as the chief of National Skill Development Corporation.

Ramadorai was earlier the Vice-Chairman of Tata Consultancy Services and is seen as a mentor to the current CEO of TCS N Chandrasekaran, who is also believed to be in the race for the top job after he was recently elevated to the board of Tata Sons by Ratan Tata.

Published on January 27, 2018

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