Tata vs Mistry war to play out in shareholders' meet in December

Business Standard takes a look at the accusations and counter accusations from both sides

On October 24, the Tata Sons board shocked the corporate world by removing Cyrus Mistry as chairman and appointing Ratan Tata as interim chairman. Since then, a bitter corporate war has erupted between Mistry and Tata, with both sides accusing each other of incompetence and destruction of shareholders' value. In the last one month, the Tata group has lost over Rs 1 trillion worth of market valuation. As the war enters its second month, the drama is set to play out in shareholders meetings called in December. We take a look at the accusations and counter accusations from both sides:

October 24: The Tata Sons board announced that it had removed Mistry as chairman and appointed Ratan Tata as interim chairman. A selection panel headed by Tata would search for a new chairman within the next four months. The statement did not cite any reasons but insiders said Mistry was removed for under-performance.

October 25: Mistry wrote to Tata Sons board saying his ouster was illegal and the group was staring at $18-billion of potential write-downs due to Tata's wrong acquisition strategy in the last few years of his tenure. Tata Sons board inducted Tata Consultancy Services (TCS) CEO N Chandrasekaran and Jaguar Land Rover CEO Ralp Speth on its board.

October 29: Tatas dismantled the Group Executive Council (GEC) set up by Mistry. GEC members, also known as "super directors" within the Tata group, Nirmalya Kumar, Madhu Kannan and NS Rajan were asked to go. Both sides hired additional public relations agencies and lawyers to take on each other.

November 1: Tata wrote to all employees on Mistry's removal; he explained that Mistry's removal was absolutely necessary for the future of Tata group.

November 4: Tatas got a shock as the independent directors of Indian Hotels expressed support for Mistry and their full confidence on him.

November 10: The independent directors of Tata Chemicals came out in full support of Mistry in a board meeting held at Bombay House. Independent director, Nusli Wadia shocked Tata as he came out in full support of Mistry. Tata supporter Bhaskar Bhat quit Tata Chemicals board after his resolution to remove Mistry was not taken into account by the board.

November 11: Tata group issued a statement accusing Mistry of ulterior objectives, and of employing devious methods to take over Indian Hotels and other operating companies, with help from the independent directors. The TCS board removed Mistry and nominated Ishaat Hussain as interim chairman.

November 12: Independent directors of Tata Steel split in support of Mistry with three directors supporting Mistry while the other three decided against coming out with any statement to support Mistry. Tata Sons also sent notices to Wadia and Mistry for removal from Tata Steel board. The Notice said that Wadia was galvanising other independent directors against the Tatas. Mistry blamed Tata for the expensive acquisition of Corus Steel that led to $10 billion of potential write down for the Indian company.

November 14: Tata Motors independent directors issued a statement in support of Mistry. An independent director said the company lost Rs 25,000 crore on the Nano project — a pet project of Tata.

November 15: Tata Global Beverages board removed Mistry as chairman with seven out of the 10 directors supporting the resolution. Mistry called the move to remove him as illegal.

November 22: Wadia served a defamation notice to Tata Sons directors on the special notice sent to remove him as an independent director of Tata Steel. The notice asked Tata to prove that he was galvanising other independent directors. Tatas ignored Wadia's two-day deadline. TCS and The Indian Hotels Company called extraordinary general meetings to remove Mistry as director.

November 23: Mistry said Tata's ego destroyed Tata group companies and resulted in huge financial loss for the group. Tata Chemicals board called an EGM on December 23 to remove Mistry and Wadia as directors. Wadia sent a second defamation notice to Tata Sons on his removal from Tata Chemicals board. Further, a third notice was sent by Wadia to Tata Sons, asking the Tata group holding company to withdraw its special notice to Tata Motors to remove him from the company’s board. Till then, Tata group companies had lost Rs 1 trillion market value within a month. The war would shift to shareholders' meetings scheduled in December.

Top 10 falls in Tata Group companies since October 24, 2016

Name	11/24/2016	% change*
Indian Hotels	95.00	-26.78
Tata Global Beverages	115.65	-24.83
Voltas	299.10	-23.98
Tata Chemicals	459.25	-20.48
Tata Motors	453.05	-18.97
Titan Company	307.85	-18.39
Tata Power	69.25	-17.17
TCS	2,186.50	-9.94
Tata Steel	398.25	-6.56
Tata Communications	634.40	-5.18
Sensex	25,860.17	-8.23

* Change over October 24

Compiled by BS Research Bureau