Turmoil Deepens at India’s Tata Group as Top Executives ExitBy and
Two more members of Mistry’s council are said to have resigned
Mistry refutes claim of not informing board of an acquisition
The acrimonious battle at India’s largest conglomerate is showing no signs of resolution as more officials resigned amid reports that an attempt at mediation between the scion of the founding family and ousted head of Tata Sons Ltd. has started.
Tata Group Chief Human Resources Officer N.S. Rajan resigned Friday, according to a company spokesman. On Saturday, Madhu Kannan and Nirmalya Kumar, members of former Chairman Cyrus Mistry’s Group Executive Council quit, people with knowledge of the matter said, asking not to be identified before an official announcement. Meanwhile, the CNBC-TV18 network reported that a trustee of Tata Trust, the biggest shareholder of the group, Darius Khambata, has initiated talks between Mistry and Ratan Tata, Mistry’s predecessor who has temporarily assumed charge.
Mistry and Ratan Tata have been trading accusations since Tata Sons, the group holding company, abruptly ousted Mistry as chairman and replaced him with the 78-year-old Tata. Tata Group on Thursday said it ousted Mistry because of a growing “trust deficit,” after Mistry said he inherited a debt-laden enterprise and singled out units including power. In a statement on Friday, Mistry refuted a claim that he hadn’t informed the family trust and Tata Sons’ board about Tata Power Ltd.’s plan to acquire Welspun Renewable Energy Pvt. earlier this year in a deal valued at 92.49 billion rupees ($1.4 billion)
While Tata Sons is an unlisted company and “therefore accountable to a limited set of stakeholders, its actions affect the entire Tata group of companies and in a sense the whole of corporate India,” Institutional Investor Advisory Services India Ltd., a proxy adviser said in a note Friday. Given the importance of Tata Sons to the group, “it is imperative for Tata Sons to disclose more than it has.”
Tata and Mistry separately met Prime Minister Narendra Modi this week, the Business Standard newspaper reported, citing people it didn’t identify. India’s Enforcement Directorate may probe allegations of fraud raised by Mistry, India Today magazine reported, citing officials at the agency it didn’t name.
Shares of companies in the $104 billion tea-to-software giant took a beating last week -- Tata Steel Ltd. fell 5.1 percent, Indian Hotels Ltd. declined 13 percent and Tata Motors Ltd. dropped 1.4 percent.