Tata Accuses Mistry of Breach of Governance as Meeting LoomsBy and
Mistry didn’t put Shapoorji holding in arms-length trust: Tata
Tata wants to remove former chairman from all company boards
Tata Group wants to remove Cyrus Mistry, the former chairman of the conglomerate, from all its company boards, citing a breach of governance and failure to distance himself from Shapoorji Pallonji & Co. and other companies owned by his family.
The fresh allegations were made in a Tata Sons statement Sunday and come ahead of an extraordinary general meeting called by the group, which is now led by founder Ratan Tata, where shareholders will vote on the leadership.
“When Mistry was appointed as executive vice-chairman in 2011, he was informed that he should distance from Shapoorji Pallonji & Company and the other Shapoorji Pallonji Group entities of which he is a major shareholder by putting his shareholding in an arms-length Trust,” Tata Sons said in the statement. Mistry agreed but later retracted, putting at risk the “high standards of self-less governance, that lies at the core of the Tata philosophy,” according to the statement.
Tata and Mistry have been blaming each other for missteps at the salt-to-software empire. The market value of the group’s listed entities has fallen more than $16 billion since Mistry was removed on October 24.
Mistry’s office denied the allegations saying the former Tata Sons chairman had ordered Tata companies to shun contracts with the Shapoorji Pallonji group.
“To say that Mr. Mistry concentrated power in his hands across companies is meaningless,” Mistry’s office said in a statement on Sunday. “Mistry expanded the oversight over his work by focusing on better board effectiveness and getting his work overseen by over 50 independent directors.”
In the statement Sunday, Tata said Mistry didn’t manage to improve declining dividend income or reduce company staff costs, risking the financial viability of the group.
— With assistance by George Smith Alexander