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Cyrus Mistry ousted due to falling revenues, 'divergence in values': Tata trustee

VR Mehta, a member of the Sir Dorabji Tata Trust, was worried about Tata Sons' over-reliance?on two companies -- Tata Consultancy Services and Jaguar Land Rover. In photo: Cyrus Mistry was the chairman of the company between 2012 and October, 2016. Photograph: (Getty)

Mumbai, Maharashtra, India Oct 26, 2016, 06.30 AM (IST)

Cyrus Mistry was removed as the chairman of Tata Sons, the largest conglomerate in India, due to "poor financial performance" and a "divergence" in values, a company's trustee told Indian television agency NDTV.

VR Mehta, a member of the Sir Dorabji Tata Trust, which along with Sir Ratan Tata Trust hold two-thirds of Tata Sons, said the other major reason the company's increasing dependence on two companies -- Tata Consultancy Services and JLR (Jaguar Land Rover).

Mehta said his trust, which is one of India's oldest philanthropic organisations in India, said: "We cannot take it for granted that these companies will continue to be as profitable always and contribute as much to Tata Sons."

He also voiced his concern about the other three-four companies that belong to the group not performing too well currently. He said a prolonged poor performance would have adversely impacted the conglomerate's revenues in the long term. 

As a consequence, falling revenues would have curtailed money available for the trust to carry on its philanthropic activities, he said.

"I had concerns, other trustees had conerns and we were discussing this for some time," he said. 

Asked about whether there was a shift in values of the company, Mehta said: "There was a divergence in the company's ethos."

Mehta also spoke about how the DoCoMo case was not handled "very cordially, to say the least". "Should have handled the case with little more finesse," he said. 

Earlier this year, Tata Sons was directed to pay $1.17 billion to NTT DoCoMo for breach of contract because the company was neither able to find a buyer nor buy back the Japanese partner's 26 per cent stake in their telecom joint venture.

Mistry 'shocked'

Meanwhile, 48-year-old Mistry shot off a mail to board members saying he was "shocked" that he wasn't given a chance to defend himself.

The hasty ouster as the company's chairman, he wrote, meant that the board had not "covered itself with glory". 

On October 24, Mistry was replaced by his predecessor Ratan Tata as the chairman of the conglomerate for four months.

(WION)
 

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