Tata Sons, the holding company of Tata group, has in a nine-page statement detailed why Cyrus Mistry was removed as chairman last month.
Excluding Tata Consultancy Services or TCS, to which the Tatas said Mr Mistry had made no significant contribution, dividends from 40 other group companies had steadily declined in Mr Mistry’s tenure, the statement said. “Dividend received from all other 40 companies (many non-dividend paying) has continuously declined from Rs. 1,000 crore in 2012-13 to Rs. 780 cr in 2015-16,” it said.
It said also said that while Mr Mistry had shared some plans for growth and management structure when he was selected to be the group’s chairman, he did not implement those in his four years at the helm.
Instead, the statement said, “many companies now have an unacceptable new structure where the Chairman alone is the only common director across several Group companies”.
Mr Mistry betrayed trust, had desire to seek control of main operating firms of Tata Group and excluded other representatives, the Tata Sons statement said.
Tata Sons has also alleged that there “were some significant issues of conflict of interest in relation to Shapoorji Pallonji group which Cyrus did not fully address”. The Shapoorji Pallonji group, a construction major, is owned by Mr Mistry’s family.
Mr Mistry has strongly denied any conflict of interest stating earlier that he had instructed Tata group companies to stop assigning new contracts to the Shapoorji Pallonji group as soon as he took over.
In a strong statement days after he was ousted as Tata Sons chairman, Mr Mistry had lashed out at the group, calling his removal illegal and invalid.
“We have received emails and calls from many across the globe since the board of Tata Sons decided to change its Chairman. Some have shared concerns following the decision, while many have asked questions about the future course of the group and its companies and operations. We understand and appreciate that a period of change like this can lead to a sense of uncertainty and would like to put forward some facts so that the decision is seen in the desired perspective,” Tata Sons said in Thursday’s statement.
Mr Mistry was removed as chairman of Tata Sons last month and was replaced by Ratan Tata as interim chairman of the $100 billion steel-to-software conglomerate.
He has this week also been removed as chairman of TCS, and Ratan Tata’s close aide Ishaat Hussain will be interim chairman till a replacement is found, the company said.
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