Cyrus Mistry gives up the battle but set for a bigger war with Tatas

After a bitter eight-week boardroom battle against Ratan Tata’s “illegal coup”, ousted Tata Sons chairman Cyrus Mistry on Monday quit from the boards of six listed companies, including Tata Motors and Indian Hotels. He vowed to shift his fight to a “larger platform” as the “coercive action taken by Tatas against various stakeholders was making him uneasy”.

In an interview to Business Standard, Mistry promised to take his fight against the Tatas to a legal forum but did not give details. “In the past eight weeks, I saw a lot of coercive action from the Tatas towards shareholders, debt holders and employees, which is making all the three uncomfortable. In various representations to shareholders, I had said it was not about me or about my position. My resignation proves that," Mistry said.

He would, however, continue to remain a director on the board of Tata Sons. The announcement of Mistry’s resignation came after he attended a “routine” Tata Sons board meeting during the day. Monday’s board meeting brought Mistry and his former mentor, Tata, in the same room for the first time (since October 24) but they did not speak to each other, according to sources.

“The interests of employees, shareholders and other stakeholders of the Tata group would be better served by (me) moving away from the forum of extraordinary general meetings (EGMs),” Mistry said in a two-page letter. “But, the time has come to take matters to their logical conclusion. I will work on protecting the interests of the Tata group and realising the vision of our founder Jamsetji Tata, until my last breath,” he added.

"Mistry can move the National Company Law Tribunal against Tata Sons for oppression of small shareholders. He can also move the Sebi (Securities and Exchange Board of India) if he has information that the Trusts had indulged in inside-trading or did not follow corporate governance norms,” said R S Loona, a Mumbai-based corporate lawyer. (more)

Nano serious drain on financial resources: Full text of Wadia's letter to shareholders of Tata Motors

Nusli Wadia charged Ratan Tata of making investments in loss-making UK operations at the cost of Indian operations

The spat between Tata Group and Mistry camp appeared to be escalating with industrialist Nusli Wadia shooting off a letter to Tata Motors shareholders, rubbishing all allegations levelled against him by the board.

Ahead of Nusli Wadia's removal in the December 22 "extraordinary" general meeting, the independent director of Tata Motors Ltd (TML) said that the Nano small car has proved to be "a serious drain on the financial resources" of the company.

In a presentation to shareholders, he said that the company was burdened with "heavy debt" and has a "substantial funding requirement for its future strategy".

This is the second time that Wadia is writing such a letter, after having shared similar views with shareholders of Tata Steel.

Here is the full text of Wadia's letter:

Tata Motors Ltd. Esteemed Shareholders, I come before you today in the most unique of circumstances. The notice that has been sent by Tata Sons for my removal as Independent Director has been with you for some time.

I. MY ASSOCIATION WITH YOUR COMPANY

I was invited to join your Company as a Director almost two decades ago based on my association with the late JRD Tata, my mentor and godfather. Whatever little I have learnt, and the values that I have tried to imbibe, are those that he gave me. The most important value that he taught me was that when one enters a Board Room, you leave your shares at the door, irrespective of whom you represent. He encouraged the freedom of thought and expression. If any member of the Board disagreed with JRD he not only respected it but appreciated it. He never expected anyone to toe his or "the Tata line". He never admonished anyone for being independent. This is what Mr. JRD Tata practised. It is both sad and unfortunate that Tata Sons and its interim Chairman Ratan Tata are not only not practising this great tradition but effectively destroying it. I have always acted as an Independent Director, long before it became a requirement to do so under any law. In July 2014, I was once again appointed as an Independent Director upto 14th February, 2019. My appointment in 2014 was with an overwhelming majority of more than 92% of the votes cast (including those of Tata Sons). I have served your Company independently for 18 years and I now stand accused of having lost my independence over events that transpired in less than 1 7 days. Read more.

Full text: Why Tata Sons lost confidence in Cyrus Mistry

Even as both camps in the Tata vs Mistry boardroombattle get ready for the impending extraordinary general meetings of various Tata group companies to oust former Tata Sons chairman Cyrus as director, the war of words through statements and counter-statements do not seem to end. On Sunday, while the Ratan Tata camp alleged that Mistry misled the selection committee to become the chairman of Tata Sons, Mistry’s office stated that Ratan Tata had been repeating the same lie a thousand times and hoping it to become a truth.

ALSO READ: Mistry misled to become chairman, says Tata Sons

Here is the full text of the Tata group’s letter to stakeholders explaining why the group lost its confidence in Cyrus Mistry:

AN APPEAL FROM THE TATA GROUP TO ALL STAKEHOLDERS OF TATA COMPANIES

Extraordinary General Meetings of various Tata Companies are coming up over the next few weeks. We, at Tata Sons Ltd., the principal shareholder and promoters of the various Tata Companies, would like to thank you for your continued support. In order to assist you to exercise your shareholder rights in an informed manner, it would be appropriate to bring to your attention some key facts which resulted in the loss of confidence in Mr. Cyrus P. Mistry by Tata Sons.

1. Mr. Cyrus Mistry misled the Selection Committee set up in 2011 for selecting a Chairman of Tata Sons to succeed Mr. Ratan Tata, by making lofty statements about his plans for the Tata Group and more importantly indicated an elaborate management structure for managing the Tata Group, given its diversity of business, by suggesting a management structure aimed at dispersal of authority and responsibility. These statements and commitments from Mr. Cyrus Mistry played an important role in the Selection Committee’s final selection of Mr. Mistry as Chairman. After waiting for a period of four years, almost none of these management structures and plans have been given effect to. Clearly, in our opinion, the Selection Committee was misled in its choice of Mr. Mistry. Read more