Andy Mukherjee is a Bloomberg Gadfly columnist covering industrial companies and financial services. He previously was a columnist for Reuters Breakingviews. He has also worked for the Straits Times, ET NOW and Bloomberg News.

What does Cyrus Mistry want? Ever since his summary Oct. 24 dismissal as chairman of Tata Sons, the spurned executive has demanded a reason for his sacking from the holding company of India's $103 billion salt-to-software conglomerate.

At the same time, Mistry, 48, has accused Ratan Tata, the 78-year-old who wrested back control of the group, of everything from a control fetish to governance failures and bad judgment. According to Mistry, Ratan Tata's 2006 purchase of Corus Group Plc's British steel assets, his vanity small-car project as well as the acquisition of pricey hotels have exposed the empire that bears his family's name to an existential threat.

Mountain of Debt
Tata Steel's net debt equals 8 years worth of earnings before interest, tax, depreciation and amortization
Source: Bloomberg

Some of this could just be wounded pride, but even if Mistry's allegations have a kernel of truth, what does he gain from trash-talking a group in which his family owns 18.4 percent? One possible answer is that he might -- if he can convince enough outside investors in operating companies to side with him -- prize open the loosely controlled conglomerate, and pluck out a big reward.

Fight Club
Market capitalization of Tata Group companies seeking shareholders' nod to oust Cyrus Mistry has fallen by $5.5 billion since the start of the boardroom putsch
Source: Bloomberg

Tuesday's shareholder meeting of Tata Consultancy Services Ltd., the software business, may have been a practice session in that treasure hunt. Tata Sons' 73 percent stake in TCS was enough for Ratan Tata to get Mistry thrown out as its chairman. But at five other companies -- Indian Hotels Co., Tata Steel Ltd., Tata Motors Ltd., Tata Chemicals Ltd. and Tata Power Co. -- the founding group owns less than 40 percent. All of them hold shareholder meetings between Dec. 13 and Dec. 26 to vote on Mistry's fate.

In three of them, he will have a formidable backer. Mistry's own core supporters, fired together with him, have no clout. But Nusli Wadia, the scion of one of India's oldest business families, is a heavyweight. He has spent a combined 90 years on three Tata boards.

At Tata Steel, where Wadia is the longest-serving independent director, he's already questioning the validity of the company's brand licensing agreement with Tata Sons, a younger company that received its first royalty payment 91 years after the steelmaker's founding. Wadia wants an examination of the agreement.

A similar suggestion at Tata Motors, where Wadia has been on the board for 18 years, would be a thinly veiled call for mutiny. The ultimate prize may be Jaguar Land Rover, the crowning glory of Ratan Tata's dealmaking career.

Tata Sons boosted its stake in Tata Motors by 1.7 percent on the day of the TCS vote, and is open to buying more ahead of the Dec. 22 extraordinary general meeting. This must be the Wadia effect. Even at TCS, retail shareholders overwhelmingly voted against Mistry's ouster. If Wadia's PR spiel can swing enough of them away from Ratan Tata, the latter's control of Jaguar Land Rover might be at risk, provided Mistry can raise money for an open offer to shareholders, a condition on which the market regulator may well insist. And that could split the empire.

On both sides, there's much high-minded talk about values, and how the other camp was ruining the group's reputation for fair play by cutting ethical corners. All that posturing diverts attention from what this spat is really about: Not U.K. steel plants laden with pension liabilities, nor U.S. hotels saddled with exorbitant lease rentals, but a car key -- or the key to a major global carmaker with a large, profitable market in China.

If that's the end game, then the fight may be well worth it.

This column does not necessarily reflect the opinion of Bloomberg LP and its owners.

  1. Investors have been warned that going against Tata Sons' wishes might cost them access to the brand. The Tata Power notice for the upcoming shareholder meeting reads: "Only Tata Sons Limited has the right to register any trademark with the `Tata' brand or bearing the name `Tata'. We cannot guarantee that the aforementioned agreement will not be terminated in the future and this may result in our having to change the name of our Company. Any value to our Company in being associated with the `Tata' brand may consequently be lost."

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