Cyrus Mistry misled to become chairman, retracted on promises: Tata Sons
Escalating the boardroom battle at India’s largest conglomerate, Tata Sons on Sunday charged Cyrus P Mistry of misleading to get selected as Chairman, retracting on his promises, concentrating powers and using free-hand given to him to weaken management structures. Days ahead of meetings of shareholders of group companies to consider removing Mistry from board of key listed companies, Tata Sons said it is bringing out “key facts” that resulted “in the loss of confidence” in him and leading to his removal.
Tata Sons said that Mistry “misled” the Selection Committee set up in 2011 for selecting a Chairman of Tata Sons to succeed 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,” it said. It charged Mistry of “inappropriate” conduct by retracting from his promise to distance himself from his family enterprise – Shapoorji Pallonji & Company to create “a sense of breach of trust” and posing “significant challenge to the high corporate governance principles Tata Sons strived for.”