The Tata (NSE:TATAMOTORS) group is India’s biggest conglomerate with business interests around the globe. The $100 billion dollar group recently ousted its Chairman Cyrus Mistry, a first time for the 150-year-old business, reinstating the earlier Chairman Ratan Tata back in the top spot.
Mistry did not take it easily. He went to the court and issued public statements saying that the move was illegal. He was the first person from outside the family to head the group. However, his family is the single biggest shareholder in the group.
The Feud Between Tata and Mistry Escalates
The bitter feud continues about a month after Mistry was removed. The move, which was a complete surprise, exposed the bitter disagreements at the Tata board. Tata’s have never removed their Chairman before this in the last 150 years. They always resign, including Ratan Tata, who stepped down at the age of 75 years, making way for a younger Mistry to take over.
Tata Sons, which is the holding company, now wants to force Mistry out from their subsidiary businesses. Till now, Mistry has been in the board of many subsidiary firms, such as Tata Steel, Tata Chemicals, and Tata Motors (NSE:TATAMOTORS).
The Tata’s have more than 100 companies, in hotels, cars, power, telecommunications, engineering, tea, airways, technology, chemicals, and others. Tata Motors makes Nano, the world’s cheapest car, and also buses, trucks, sedans, the Jaguar Land Rover, and the Range Rover vehicles. The steel business has huge plants in India and Europe with a turnover of $16 billion.
Mistry Removed from TCS
Tata Consultancy Services or TCS is one of the key subsidiaries of the group. Mistry was removed as the Chairman of this technology business late last week. However, he complains that TCS asked beyond its powers. For instance, no board meeting was called for discussing his ouster. It was done “In pre-mediated haste”, Mistry says. The hasty actions appear to have been done at night”.
Mistry added saying, “Cloak and dagger machinations with little regard to due process of law has come to define the angry strategy of the Ratan Tata camp”. He says Tata has stooped to a new low. No director of the company should be influenced by the Tata’s, he adds.
Earlier, Mistry was charged for mishandling a harassment allegation in their hotel business, which he denies. He has also been charged of poorly managing many key businesses like their UK steel business.