See a copy of the letter Cyrus Mistry wrote to the Directors of Tata sons, attached at the end of this post. A must read!
[dropcap color=”#008040″ boxed=”yes” boxed_radius=”8px” class=”” id=””]W[/dropcap]hile mainstream media is beating around the bush on the tussle between Ratan Tata and Cyrus Mistry, senior Tata executives started revealing the real reasons behind the unpleasant situation. According to the senior executives, Ratan Tata started annoying Cyrus Mistry for the past two years and the real reasons are Cyrus Mistry’s actions to undo the “bad decisions” taken by Ratan Tata in the acquisition of foreign companies, illegalities in floating and funding airline companies like Vistara and Air Asia and non-viable actions in Tata Steel and the failed Nano project.
From Day 1, Cyrus was sceptical about the Nano project and his fears came true after the Supreme Court’s verdict on Singur.
The last provocation was Mistry’s decision to sell off Tata Steel’s acquisitions in Europe. According to Tata executives, Cyrus was airing his opinion on Ratan Tata’s “follies” in non-viable acquisitions across the globe. For the past two years, Ratan Tata and his trusted man R K Krishna Kumar were monitoring the moves Cyrus made with suspicion, and the senior executives vouch the displeasure was evident in several internal mails.
Cyrus in several board meetings expressed illegalities and bad decisions taken by Ratan Tata in covertly supporting and funding Air Asia and operating Vistara. The Tata insiders say, Cyrus openly reiterated that the Public Interest Litigation (PIL) filed by senior BJP leader Subramanian Swamy would expose the wrongdoing of Ratan Tata for backing Air Asia. He cited several violations of Civil Aviation and Foreign Investment Promotion Board (FIPB) policies in the starting of Vistara and backing of Air Asia. According to insiders, Cyrus once opined that Ratan Tata’s madness to aviation is going to expose the group’s illegalities committed. He said he would use his prerogative as Tata Sons head to undo Ratan Tata’s bad decisions.
[dropcap color=”#008040″ boxed=”yes” boxed_radius=”8px” class=”” id=””]F[/dropcap]rom Day 1, Cyrus was sceptical about the Nano project and his fears came true after the Supreme Court’s verdict on Singur. Ratan Tata would sometime lose his cool on Cyrus observations on the failed Nano project, it is alleged. Many old loyalists of Tata, led by Krishna Kumar had ignited the tussle, say senior executives.
It is widely believed that Ratan Tata and Krishna Kumar apprehended that Cyrus was going to undo several of their decisions in Tata Steel, Tata Chemicals, Tata Motors and Civil Aviation sectors.
Ratan Tata has the habit of buying hotels, wherever he spent vacations and these unstudied acquisitions across the globe based on his fancy had affected the balance sheets of Tata’s hotel business. Many hotels acquired abroad became a financial disaster, say the top executives, who wish to remain anonymous.
The decision to sell the UK’s steel operations may have been the last straw, according to the officials. It is widely believed that Ratan Tata and Krishna Kumar apprehended that Cyrus was going to undo several of their decisions in Tata Steel, Tata Chemicals, Tata Motors and Civil Aviation sectors. This led to the unceremonious exit of Cyrus Mistry, vouch senior Tata executives, citing several internal emails of bickering messages for the past two years.
The market has not liked the exit of Cyrus. Tata stocks are down and perhaps the market knew of the internal rumblings in the Tata group. The last word has not been said about this. Stay tuned.
Just as this post was going online, we came across a copy of a letter by Cyrus Mistry to the Directors of Tata Sons and the same is shown below: