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A questionable strategy

Selling TCS stake to salvage strugglers isn't a good move

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Business Standard Editorial Comment

Business Standard Editorial Comment 



Tata Consultancy Services (TCS) was not one of the group companies ousted chairman Cyrus Mistry mentioned in his bitter letter to the Tata Sons board on October 25. But it is no surprise that this jewel in the crown has been, from some accounts, the source of serious disagreement between him and Ratan Tata. It is perhaps also not surprising that the divergence reflects a key proclivity of promoter-owned groups in India — of leveraging high performers to salvage the strugglers. Mr Mistry had reportedly ignored advice from the Tata Trusts, the Ratan Tata-led entities that exercise majority control over Tata Sons, to sell a five per cent stake out of its 74 per cent shareholding in TCS to recapitalise some of the floundering group companies.

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First Published: Tue, November 08 2016. 23:44 IST

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