 "Recap: Tata wants to sell Mistry's stake,bankers vouch for group's financials")
As the slugfest between the Tata Group and ousted chairman Cyrus Mistry gets uglier with Tata Sons accusing the latter of making "unsubstantiated claims and malicious allegations" against the Indian conglomerate, here's a recap of events that you may have missed:
Cyrus Mistry's charges unforgivable, says Tata Sons
A day after former chairman of Tata group Cyrus Mistry’s letter accusing the earlier management led by Ratan Tata of saddling the group with bad investments that could potentially lead to Rs 1.18 lakh crore of write-downs became public, the Tata group hit back saying group companies made disclosures on all impairments and presented a true and fair picture of their accounts to shareholders. ( Read more here).
Tata Sons response is to the scathing letter written by Mistry to the board. According to the letter Mistry has not only described the board proceedings as invalid and illegal but also alleged that he had not been given any free hand despite being assured of the same by Ratan Tata before he accepted the top job. Mistry alleged that after he was appointed as chairman, Tata Trusts amended the articles of association which constrained his ability to engineer a turnaround. The text of the letter follows: You can read the entire letter here
Tata Sons response is to the scathing letter written by Mistry to the board. According to the letter Mistry has not only described the board proceedings as invalid and illegal but also alleged that he had not been given any free hand despite being assured of the same by Ratan Tata before he accepted the top job. Mistry alleged that after he was appointed as chairman, Tata Trusts amended the articles of association which constrained his ability to engineer a turnaround. The text of the letter follows: You can read the entire letter here
Tata said to approach sovereign funds on buying out ousted chief
The Tata family trusts have reached out to sovereign wealth funds and other long-term investors to gauge their interest in purchasing the Mistry family's stake if it became available, according to the people. The trusts held preliminary talks with potential buyers of the about 18 per cent Tata Sons stake as they prepare for a number of possible scenarios, the people said. Mistry's family doesn't currently plan to sell its holdings, the people said, asking not to be identified because the information is private. (Read more here)
Bankers vouch for Tata Group, say write-down claims exxagerated
Vouching for sound operating practices in Tata group companies, bankers with high financial exposure to these firms said the claims on write-downs worth $18 billion were highly exaggerated. Their defence for the group came after Cyrus Mistry, its ousted chairman, on Wednesday said acquisitions by Tata Steel in Europe and the hospitality sector and investments in Tata Teleservices and the sector power could lead to an additional write-down of $ 18 billion.( Read more here)
Meanwhile, BS found that Tata saw faster dividend growth under Mistry
The combined dividend pay-out by the groups' 18 main listed companies grew at a compounded annual growth rate (CAGR) of 15.7 per cent during his three-year tenure, sharply up from 2.5 per cent CAGR during the previous three years. This was largely due to higher pay-out by the group cash cow - TCS, even as many of the group's biggies such as Tata Motors, Tata Steel, Tata Power and Tata Chemicals either skipped dividend or kept it stagnant under his tenure.( Read more here)
But with Mistry gone, the old guard are celebrating Ratan Tata's return
They may or may not have been able to read the tea leaves but the return of Ratan Tata at the helm has brought much relief to old timers within the group. “Many young people had been inducted to the Group Executive Council (GEC) who lacked experience,” an old timer pointed out. The GEC was set up by Mistry to provide strategic directions and operational support.It’s not just the old timers who are celebrating the comeback. There is muted exuberance among thousands of TCS employees across Gurgaon, Bengaluru and other centres. ( Read more here)
But with Mistry gone, the old guard are celebrating Ratan Tata's return
They may or may not have been able to read the tea leaves but the return of Ratan Tata at the helm has brought much relief to old timers within the group. “Many young people had been inducted to the Group Executive Council (GEC) who lacked experience,” an old timer pointed out. The GEC was set up by Mistry to provide strategic directions and operational support.It’s not just the old timers who are celebrating the comeback. There is muted exuberance among thousands of TCS employees across Gurgaon, Bengaluru and other centres. ( Read more here)
Among the companies that are vulnerable to Mistry’s exit is Tata Steel, especially its European venture. Mistry was strongly in favour of selling the unit. He had already started selling the company in parts by selling the Scunthorpe Steelworks earlier in May.Tata Steel and more specifically its European operation will be at the centre around which the battle will be fought. ( Read more here)