Cyrus Pallonji Mistry, 50, the ousted chairman of Tata Sons, has decided to take the legal route in his fight against the diversified conglomerate. In this interview, Mr. Mistry, an Irish citizen of Indian origin, says the fight is not for position but for governance within the group, especially Tata Sons and the trusts. Edited excerpts:
You are resigning from all group companies and taking the legal route?
One of the things that you all have known and I think that it has been consistently part of my DNA right through is actually to ensure that the companies are always protected. That has been the foremost in my mind. Every thing that I have done through this process is to ensure that the companies do not get hurt. But what I have seen in the past eight weeks is significant cohesive behaviour from Tata Sons and it is available in black and white in the type of shareholders’ notice and in terms of threatening to remove the brand, threatening financial support removal and a number of other things creating a huge amount of insecurity amongst shareholders and our own employees. I had to take a call. I had to reflect and sit back and see what is in the best interest of the group from a longer perspective. I think it is extremely important that the journey for governance reform and ethics does not get delayed. But, at the same point of time, it is equally important that I do not create a disruption and do not let them create a disruption in the companies and the stakeholders. With that in mind I have done this move. Many a shareholders that I met said ‘Cyrus we agree with you, we sympathise with you and we believe that governance reform is done. But we also are concerned and worried that the hit the group is taking.’ I think it was for me to take the appropriate decision rather than leave it open. With that in the back of my mind, I vacate one forum but concentrate on another forum where I can actually fight this battle. I have always said that we will take it to the next level. When was the right time to do so? I think now is the right time to do so!
Going to the courts will lead to a long battle?
I think the type of uncertainty that it will create will be less for the operating companies and may be more for the holding company.
What will be your main plea in your case?
A: Sorry, I won’t discuss legal strategy
Are you taking the legal route as the EGM results were more like a foregone conclusion? (six Tata companies have EGMs scheduled to vote on resolutions seeking Mr. Mistry’s removal)
A: My worry was that I would win! Let me be very frank. They created a situation wherein effectively most of the shareholders, independent directors and employees were concerned about ‘what if I win’. So it is not a case of winning or losing. The more important thing was what happens if I win. And that was the case that was created by the Tata Group and Tata Sons that they would disrupt the functioning of the company if I continued to be on the board. I did not want to put the employees, management and the independent directors of the board through that process. My thing is to be constructive and not destructive. I think it has always been consistent with my actions. This has not been a fight for position. I never wanted that and therefore, if it was a fight for position, why would I have stayed through the EGM of TCS because it (the outcome)was a foregone conclusion. I wanted to stay to show that it was not a fight for position. This is actually to ensure that we push ahead and get different stakeholders to put together on the Tata Group to ensure that reforms take place. I continue to be on the Tata Sons board.
If the fight is not for position then what is your fight for?
It is for governance. I am out of the position side, I was actually out on 24th (October). And it is not like I have decided it today. I have communicated it right through. Part of my agenda on the day I was removed was all about how to put the governance structure in place. How do you make sure that governance structure actually is vibrant, creates positive results for the companies. One of the roles that I have played is actually institutionalising the group. So, if you look at the group operating companies, we have now governance guidelines which effectively ensured that I was evaluated by 50 independent directors a year. I would like to ensure that that is the kind of processes that are put in place in Tata Sons and the Trusts itself.
So the legal battle is for governance?
The court cases will be for making sure that at all levels, governance and rights of all the shareholders including minority are well protected.
You are out of the group and fighting a legal battle. So how will you ensure that governance is in place?
I am looking at different forums for making sure that happens. But the legal forum is one of the largest forums.
Is this kind of a u-turn in your strategy? You could have stepped down on the day you were asked to leave. Much shareholder wealth has eroded since then.
Me staying and being a constructive part of the board was not eroding the wealth. But, taking out a person for no reason erodes wealth. Cohesive action with your shareholders, board and board members takes out wealth. That is the way I look at it. And I think effectively today is the right time to change the forum.
What happens to your stake in Tata Sons?
We can always take decisions based on either the short-term or long-term. We can take decisions based on either what is right or what is convenient. I have followed one philosophy. You do the right thing, look at the long-term, make sure the institution flourishes. If we actually undermine the institution today, then you will actually lose the institution going in the future.
Do you want to be Tata Sons chairman again?
I have no hankering for any position. I have said that right from day one. I did not come in for position and no body has refuted that in terms of the way I came in. I have maintained that consistently in all my letters that it was not for position. I am extremely lucky with what I have been given. Our family has been associated for 50 years. The role that we have played is one of guardianship. The role that I would like to play is still one of guardianship. The forum might change but the role will be the same.
Are you joining back the SP Group?
No decision has been taken on that.
Published - December 19, 2016 10:43 pm IST
