'Tatas, Mistry's back and forth distraction from core issue'

The current back and forth between Tata Sons and its ousted chairman Cyrus Mistry is "reactionary" and unlikely to provide any meaningful long term solution, according to proxy advisory firm IiAS.
Noting that the decision of independent directors of Tata Chemicals and Indian Hotels Company to support Mistry adds to the growing complexity of the current narrative, IiAS said Tata group needs to focus on making its complicated holding and governance structure work.
"The independent directors in the operating companies are right in taking a stand and providing guidance. But we are concerned with the way the situation is playing out: their decision threatens to dismember the companies from Tata Sons and effectively, the group," it said in a report.

Further, the contrarian positions of Tata Sons and the two listed companies on the issue is further confusing investors, it added.
Mistry, who was chairman of Tata Sons for nearly four years, was sacked by Tata Sons board on October 24 but he continues to remain chairman of various group firms.
"The current back-and-forth between Tata Sons and Mistry, with independent directors of listed companies in the fray, is reactionary -- and unlikely to provide a long-term solution," the proxy advisory firm said, adding that it believes the "current combative conversation" between the two is a distraction from the core issue.

IiAS also noted that leaving aside the personalities involved, the root cause of the current conflict is the Tata group's operating structure itself.

"The current turbulence creates the right opportunity for the Tata group to set the structure right. The group should make the most of it," the report said.
Amid the feud, Tata Sons has replaced Mistry as Chairman of Tata Consultancy Services (TCS) where it holds little over 73 per cent stake.
Besides, Tata Sons has sought removal of Mistry from the boards of Tata Motors, Tata Steel and Tata Chemicals.