Wednesday, October 26, 2016

Cyrus Mistry blames Ratan Tata for 'constant interference' in email to board

New Delhi: Two days after he was ousted as the chairman of Tata Group, Cyrus Mistry on Wednesday accused directors at India’s largest conglomerate of wrongfully dismissing him.

Mistry described his removal as "unprecedented" in India, saying he was ‘shocked’ at the manner in which he was removed. Mistry claimed he had not been given a chance to defend himself before being ousted. However he said he was not considering legal options at this stage.

According to a report in NDTV, Mistry in an email to the Board said that the conglomerate may face 1.18 trillion rupees ($18 billion) in writedowns because of five unprofitable businesses he inherited.

Defending his record, Mistry said he inherited a debt-laden enterprise saddled with losses. In particular, he blamed Indian Hotels Co., Tata Motors Ltd.’s passenger-vehicle operations, Tata Steel Ltd.’s European business, as well as part of the group’s power unit and its telecommunications subsidiary.

He said that despite plowing 1.96 trillion rupees -- more than the net worth of the group -- into those units into these companies, they still face challenges, and Rs 1.18 trillion rupees might have to be written down over time.

Mistry also said he was trying to turn things around at the group since taking on the chairmanship. But he faced constant interference by Ratan Tata, to the point that he was pushed into becoming a "lame duck" chairman, he alleged in the email.
For example, Mistry wrote, Tata Nano was a severely loss making enterprise that should be immediately shut down.

"Emotional reasons alone have kept us away from this crucial decision,” he claimed.

The former chairman also blamed Tata for problems at Indian Hotels, which runs the Taj chain. Mistry said that the unit had acquired a hotel in Mumbai at a highly inflated price that had forced the company to write down nearly its entire net worth.

Representatives for Tata Sons and Mistry declined to comment on the letter, said the report.

No comments:

Post a Comment