Full text: Cyrus Mistry statement rebuts Tata claims on management structure

Says Ratan Tata, to overcome a disaster unleashed by his actions, is repeating a lie a thousand times and hoping it becomes truth

Following a no-holds-barred Tata Sons statement claiming ousted chairman Cyrus Mistry had misled the selection committee set up in 2011 to find a successor to Ratan Tata, the office of Cyrus Mistry issued a counter-statement late in the evening to rebut the claims.

While Tata Sons statement said "Mistry made lofty statements about plans for Tata Group, but didn't give into effect management structures and plans he promised", Mistry’s statement said Ratan Tata’s new mantra to overcome the “monumental disaster his actions have unleashed” seems to be repeating a lie a thousand times and hoping that it becomes the truth.

Here is the full text of Cyrus Mistry’s statement:

Repeat a lie a thousand times and hope it becomes a truth, seems to be Mr. Ratan Tata's last-ditch effort to overcome a monumental disaster his actions have unleashed. The press statement from Tata Sons under Mr. Tata contains a regurgitation of fake innuendo that Mr. Tata has resorted to through unnamed and named spokesmen in recent weeks. Nevertheless he merits a short crisp response.

First, there is no question of any misrepresentation to the Selection Committee that appointed Mr. Mistry to Tata Sons Chairmanship. On the contrary if Tata Sons had any point at all to make it would have complied with law to form a Committee now to logically present charges against Mr. Mistry. Armed with nothing better than the limp nature of contents of today's statement, it was obviously not an option for Mr. Tata.

Unsurprisingly, Mr. Ratan Tata's close personal friend Lord Kumar Bhattacharya, the constant feature of the Selection Committee, then and now, just six months ago spoke positively of Mr. Mistry's performance. In fact, when Tata Steel's expensive presence in the United Kingdom was being firmly dealt with finally, Lord Bhattacharya spoke up in the Financial Times. The report is hosted on the Financial Times website (Date 4th April 2016).

Second, the structure of the Tata Sons Chairman being the Chairman of key Tata Group operating companies is something that preceded Mr. Ratan Tata's time, and  an approach he encouraged and perpetuated. To say that Mr. Mistry concentrated power in his hands across companies is meaningless since Mr. Mistry expanded the oversight over his work by focusing on better board effectiveness and getting his work overseen by over 50 independent directors.

The allegation of concentration of power is new-found wisdom being written after seven weeks of failure to come up with any reason for upstaging Mr. Mistry. On almost all Tata Boards there was Tata Group representation. Mr. Ishaat Hussain on Tata Steel and TCS, Mr. Nirmalya Kumar and Mr Bhaskar Bhatt  on Tata Chemicals, Mr. NS Rajan on IHCL, Mr. Harish Bhatt on TGBL, as well Mr. S Padhmanabhan, Mr. Bharat Vasani and Mr. F N Subedar to name a few other Tata Sons representatives on Board of other Tata Companies. Under Mr. Mistry's approach, Tata CEOs serve as Tata representatives on group company Boards -- examples: Mr. Noel Tata on Titan Industries and Voltas, and Mr. Praveen Kadle on Tata Auto Comp.

Third, the hollow claim of conflicts in handling the interests of the SP Group has been addressed earlier. But it is important to add that Mr. Mistry did not sit on a single Board of the SP group other than his family investment company. New engineering and construction contracts from the Tata Group to the SP group came down to nearly zero from the level of Rs. 1100 Crores when Mr. Mistry had assumed office. Little wonder that the Tata statement fights shy of citing data. Starting with a firm written instruction to Tata Group companies to shun contracts with the SP Group issued in October 2013, Mr. Mistry formally appraised the Tata Sons Board on the status every six months.

Finally, the Tata statement still refers to rise in expenses for Tata Sons. The answer lies in the statement already made by Mr. Mistry's office. Costs incurred for Mr. Tata and his PR agencies form a sizeable chunk.

Mr. Ratan Tata's conduct has eroded the Tata Brand and values materially. Mr. Mistry's family as the owner of over 18% interest in Tata Sons is as injured by any injury caused to Tata Sons. Far from hurting the Tata Sons businesses intentionally, Mr. Mistry is saving the Tata Group from the whimsical ineptitude of Mr. Ratan Tata.

The Tata Trusts have done great work in the past. However some of the recent actions by Mr. Ratan Tata and his coterie that now runs the Trusts have raised great concern on the ethics that surround decision-making.