Tokyo: Former Tata Group chairman Cyrus Mistry said he was wrongfully ousted and criticised the conglomerate’s directors of failing to perform their fiduciary duties, the Economic Times reported on Wednesday, citing an email the executive sent to board members and major stakeholders.
The decision, which he described as invalid and illegal, had left him “shocked beyond words” as the board removed him without an explanation and deprived him of the opportunity to defend himself, the newspaper reported Mistry as saying in the email.
He wrote the email to emphasise “the total lack of corporate governance and a failure of the directors to discharge their fiduciary duty to stakeholders of Tata Sons and the group companies,” the Economic Times cited Mistry as saying. “The sudden action and lack of explanation has led to all manner of speculation and has done my and the group’s reputation immeasurable harm.”
A spokeswoman at Tata Sons, the group’s holding company, didn’t respond to calls to her mobile phone.
Mistry said that after accepting the job on condition he would have the power to make changes as he saw fit, alterations to the company’s articles of association created “alternative power structures” that undermined his ability to turn around Tata’s businesses, the newspaper reported, citing the email. The group’s joint ventures with AirAsia Bhd and Singapore Airlines Ltd, for example, were presented as done deals at the behest of Ratan Tata, according to the report.
Mistry also wrote that Tata’s past foreign acquisition strategy bloated its debt to the point that the European steel business is facing potential impairments of $10 billion, Tata Capital has enormous non-performing loans to a businessman based in the country’s south and Tata’s telecommunications business was continuing to lose money, according to the report.
On Monday, India’s largest business group abruptly ousted Mistry and replaced him with his predecessor Ratan Tata.
