Ousted Tata Group chairman Cyrus P Mistry announced his resignation from all Tata Group companies on Monday, in the light of “the events of the past eight weeks”. Mistry announced the resignation after he pulled out of shareholder meetings of five listed Tata Group firms.
Many have asked me why I have raised issues only after Mr Ratan Tata staged the illegal coup. Unknown to the world, I had confronted serious governance problems and ethical issues for a considerable period. My efforts were aimed at reforming the system, which may well be the reason for my removal. By removing myself from general meetings, I reinforce my position that this is not a fight for position but for a secure reform.Cyrus Mistry’s Statement
However, a counter-statement from Tata Group has dismissed the various allegations made in Mistry’s statement, calling it a “deliberate strategy”.
Mr Mistry’s resignation is a deliberate strategy on his part, knowing fully well that the overwhelming majority of the shareholders were not in support of his actions. Unfortunately, Mr Mistry continues to make baseless, unsubstantiated and malicious allegations using selective disclosures of information against the very institution he claims to have the highest regard for.
In his statement, Mistry said that he had reported fraud within Air Asia India on 24 October. He also stated that Ratan Tata released funds to Air Asia India “with full knowledge of the fraud”.
In a two-page statement and a recorded video message, Mistry, who was unceremoniously removed as Chairman of Tata Sons on 24 October, said the objective of effective reform and best interests of employees, shareholders and other stakeholders of the Tata Group "would be better served by moving away from the forum of the extraordinary general meetings". Mistry also invoked Jamsetji Tata, claiming to take the move to safeguard his legacy. To this, the Tata Group responded by saying:
Tata Sons strongly resents the claims by Mr Mistry to align with the values and ethics of Jamsetji Tata and the Tata Group. On the contrary, Mr Mistry and his family companies have not upheld the high standards and values set by Jamsetji Tata and his successors. Mr. Mistry has done precious little to build the goodwill of the Tata Group, built through the hard work and dedication of its employees.
While Mistry, 48, did not specifically say he was resigning from either Tata Sons, where he still continues as a director despite being removed as chairman, or from the operating firms, sources close to him said he has quit.
Both sides told the media that operating companies will make regulatory announcements to the stock exchanges shortly.
Tata Sons, the holding company of the $103 billion group, has called Extraordinary General Meeting (EGMs) of listed companies to consider its proposal to remove Mistry as the director on their board.
Terming his fight a "movement for cleaning up governance and regaining lost ethical ground," he said, "It is time to shift gears, up the momentum and be more incisive in securing the best interests of the Tata Group.”
He said he has decided to "shift this campaign to a larger platform and also one where the rule of law and equity is upheld".
Though Mistry did not elaborate on the platform, commentators said he might be considering moving courts against his ouster.
He thanked stakeholders for their support and urged them to continue to ask the right questions and demand the right actions.
Tata Trusts, which controls about 66 percent of Tata Sons, wielded no voting power until about 15 years ago.
(With PTI inputs.)
(At The Quint, we are answerable only to our audience. Play an active role in shaping our journalism by becoming a member. Because the truth is worth it.)