Read Cyrus Mistry's letter to Tata Sons' board members: 'I was pushed to a position of lame duck chairman'
Ratan Tata (R) and deputy chairman Cyrus Mistry (L) attend the launch of a new website for tech superstore Croma, managed by Infiniti Retail, a part of the Tata Group, in Mumbai, India on April 23, 2012.
In an explosive confidential email sent to the board members of Tata Sons, sacked chairman Cyrus Mistry has levelled serious allegations against India's largest conglomerate saying that he was pushed to a position of "lame duck" chairman, Indian news agency PTI reported.
Mistry, who was removed as the chairman on Monday, has said that predecessor Ratan Tata replaced him as the chairman 'without a word of explanation'
In the internal email, he has alleged that "changes in decision-making process created alternate power centres in Tata Group".
Mistry, who was appointed in 2012 as the chairman, mentioned in the letter: "I was shocked beyond words at the happenings at the board meeting of October 24, 2016. Apart from the invalidity and illegality of the business that was conducted, I have to say that the Board of Directors has not covered itself with glory.
"To 'replace' your Chairman without so much as a word of explanation and without affording him an opportunity of defending himself, in a summary manner must be unique in the annals of corporate history," he wrote in the email on October 25 which was circulated widely to the media today, PTI reported.
The modification in the Articles of Association, changed the rules of engagement between the Tata family Trusts and the board of Tata Sons that restricted his decision-making process, the ex-chairman further points out in the letter.
The move to replace him has hurt his reputation, Mistry says in the letter. (WION)
The letter also points out that the conglomerate faces 'potential writedowns to the tune of close to $18 billion due to investments in unprofitable businesses', international news agency Reuters reported.
Mistry, who stated that he had inherited a debt-laden enterprise, has said that Indian Hotels Co, passenger-vehicle operations of Tata Motors Ltd, the loss-making European steel operations of Tata Steel, its telecom venture and a ultra mega western Indian power plant of Tata Power are "legacy hotspots" of the company.
The letter also highlights corporate governance issues within the conglomerate. He also claims that representatives of family trusts, who hold two-thirds of Tata Sons shares, have been reduced to "mere postmen" as they left board meetings midway to "obtain instructions from Mr. Tata."
Further, he has said that the loss-making Nano car project could not be shut down for "emotional reasons" and because it would have stopped the supply of Nano gliders to an electric car making entity where Tata had stake.
He alleged that it was Tata who forced the group to foray into the aviation sector by making him a 'fait accompli' to joining hands with Air Asia and Singapore Airlines and making capital infusion higher than initial commitment.
Also, "ethical concerns" had been raised over certain transactions and a "recent forensic investigation revealed fraudulent transactions of Rs 22 crore involving non-existent parties in India and Singapore," he wrote, PTI reported.