The office of Cyrus Mistry, who was removed from the post of executive chairman of Tata Sons Ltd., has contested certain points Ratan Tata made in an interaction with The Hindu (June 4, 2017).
On the report headlined “Conflict of interest led to Mistry’s removal: Ratan Tata”, the statement said the “discussions between Mr. Tata and Mr. Mistry at the time of Mr. Mistry’s selection and thereafter, never involved putting an end to the historical commercial transactions between the Tata Group and the Shapoorji Pallonji Group.” These “revolved around a disclosure regime and Mr. Mistry not being involved with the SP Group’s decision-making processes.”
Independent panel
The statement said that “in early 2013, after taking over as executive chairman, Mr. Mistry implemented voluntary disclosures of transactions with the SP Group, irrespective of value, over and above requirements of law. He mooted an independent governance committee comprising three persons to be nominated by the Tata Trusts to review and consider for approval any related party transaction. Mr. Mistry was entirely disassociated with any transaction with the SP Group.
The statement said the SP Group’s relationship with the Tata Group is over 75 years old and it was not something initiated after Mr. Mistry was made executive chairman. In 2009, when Tata Motors went through a cash crisis, but had to build the Nano plant in Gujarat and had to expand its commercial vehicle plants, it was the SP Group that extended significant credit limits and even raised debt on its own balance sheet to extend support. The SP Group’s revenues from Tata contracts dropped from approximately Rs. 1,200 crore in 2013 when Mr. Mistry took over to almost nil in 2016. Mr. Mistry was disengaged from the functioning of the SP Group, and devoting his entire attention to the Tata Group.
The Tata Sons Board, far from it being marginalised, was presented a professional of the affairs of all companies of the Tata Group. The directors of Tata Power, including independent directors, had cleared the Welspun transaction. Before the Welspun deal was done, the Tata Sons Board was informed. The statement pointed out that the National Company Law Appellate Tribunal is in the midst of hearing an appeal from orders of the National Company Law Tribunal.
