Tata Steps Up Attack on Mistry as India’s Biggest Feud EscalatesBy and
Mistry poised to be removed as head of Tata Consultancy unit
Move deepens rift between Tata patriarch and his successor
The standoff between Tata Group’s patriarch and his estranged successor intensified in India’s biggest feud since a quarrel between the billionaire Ambani brothers broke out more than a decade ago.
The Ratan Tata-led camp, which last month ousted Cyrus Mistry as chairman of the nation’s largest conglomerate, on Wednesday took steps to muscle Mistry out of the group’s largest subsidiary and accused him of being a poor leader who’s seeking to wrest control of some key units. In response, people close to the deposed executive said Tata’s allegations were unsubstantiated. They asked not to be identified as they’re not authorized to speak to the media.
The deepening dispute threatens to prolong the turmoil roiling a $100 billion business empire that makes products ranging from table salt to Jaguar sports cars. The wrangling has also cost investors as Tata Group’s listed companies have lost more than $10 billion in market value, underperforming India’s benchmark index, since Mistry was abruptly ousted less than three weeks ago.
"The Tata Sons letter seems to refer to performance as the bugbear,” said Shriram Subramanian, founder of proxy-advisory firm InGovern Research Services. “However, it seems strange that individual boards haven’t pulled up the Chairman for non performance."
The feud emerged on Oct. 24, when Mistry was abruptly removed as chairman of group holding company Tata Sons Ltd., less than four years after succeeding Ratan Tata. Mistry balked back, saying he was wrongfully terminated and alleging that constant interference from his predecessor undermined Mistry’s ability to fix problems at the group he inherited, according to a copy of a letter to the board of Tata Sons seen by Bloomberg.
Though Mistry was kicked out of the holding company, he retained his chairmanship at key listed units. Outside directors at one of those subsidiaries, Indian Hotels Co., even issued a statement supporting Mistry days later. On Thursday, independent directors of Tata Chemicals Ltd. said they support decisions taken by the former group chairman.
Tata in a filing to exchanges announced plans to remove Mistry from his posts at group crown jewel Tata Consultancy Services Ltd. and Indian Hotels, which operates the Pierre in New York. The group also expressed surprise over why Mistry didn’t resign from the boards of other Tata units and alleged that the disgruntled executive is colluding with directors at Indian Hotels to take control of the company from the group -- claims that people close to Mistry denied.
Mistry wasn’t available for an interview and his office declined to comment.
Tata also said that for the exception of the group’s two best-performing businesses -- Tata Consultancy and Jaguar Land Rover -- the conglomerate floundered under Mistry. People close to the former chairman said those allegations were wrong. The holding company also said that it received less dividend reflecting a decline in profit at its units.
— With assistance by P R Sanjai
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