Exclusive: On Cyrus Mistry’s Watch, ‘Family Jewels’ Were At Risk, Say Sources Close To Ratan Tata

617 views Leave a comment

NEW DELHI: A day after Cyrus Mistry was dumped by India’s largest conglomerate as its top boss, sources close to Ratan Tata, who has been brought back as Chairman, accused Mr Mistry of wanting to “sell the family jewels” or the group’s steel interests in the UK, and wanting to “throw Ratan Tata under the bus” in the bitter break-up with DoCoMo, which has won $1.2 billion in an arbitration case with the Tata Group.

Mr Mistry’s surprise removal four years after he became the first Chairman of Tata and Sons who does not belong to the group’s founding family has resulted in nasty whispers from both sides about his removal from the 103 billion dollar group which owns companies in nearly 100 countries.

In words that indicate the level of bad blood and suspicion that had built up against Mr Mistry over months, sources who are close to Mr Tata, the patriarch of the group’s founding family, say that Mr Mistry’s departure was deliberated over months and was the result of a difference of opinion between him and the board.

“While the circumstances are being studied, there is no basis to media speculation about litigation at this stage,” said a spokesperson for Mr Mistry’s Shapoorji Pallonji family, which is one of the biggest shareholders in Tata Sons.

The DoCoMo case was allegedly “the breaking point”, said sources who asked not to be named. In 2009, DoCoMo, a Japan firm, bought a 26.5 percent stake in Tata Teleservices Ltd but announced plans in 2014 to exit the venture, which struggled to boost subscribers as quickly as its peers. DoCoMo then asked Tata to find a buyer for its stake at a pre-determined price. Tata failed to find a buyer and instead offered to buy the stake itself. The RBI, however, rejected Tata’s offer, saying it violates new rules. DoCoMo then sought international arbitration and was awarded 1.2 billion dollars as settlement.
Lawyers who had advised Mr Tata for years were reportedly not consulted by Mr Mistry, sources say, which added to the mistrust and the belief in Mr Tata’s camp that he would be made “the fall guy” for the hefty business disaster.

There was also growing disquiet in the Tata Group that Mr Mistry was “selling the family jewels” and “undoing all that the Tatas had built” by deciding to sell the empire’s entire steel operation in the UK which was in bad shape on account of cheap Chinese imports, soaring costs and weak demand.

The decision to sell the Tata-owned Taj Boston Hotel, acquired from the Ritz Carlton group, and also put the Taj’s ritzy New York hotel on the block was seen as a continuation of this “sale of family heirlooms.”

Mr Mistry has also been charged with failing to grow the iconic auto brand Jaguar Land Rover, which was acquired on Mr Tata’s watch in 2008.

The board made its decision to remove Mr Mistry at a lengthy meeting on Monday, with six of the nine members backing the ousting of Mr Mistry. Two members abstained. Mr Mistry, who could not vote, remains a board director.

Original Post by ndtv.com

Leave a Reply

Be the First to Comment!

Notify of
avatar
wpDiscuz