InvestorQ : Why has Ratan accused Cyrus Mistry of trying to usurp greater control of Tata Sons through the back door?
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Why has Ratan accused Cyrus Mistry of trying to usurp greater control of Tata Sons through the back door?

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Moii Chavate answered.
3 months ago
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Ratan Tata has accused the former chairman of Tata Sons, Cyrus Mistry, of misleading the Supreme Court in the ongoing legal tussle between the two sides. Tata has alleged that Cyrus wanted to grab control of Tata Sons and this battle was not about corporate governance at all. Tata Sons is the holding company of the Tata Group.

Ratan Tata was reacting to the demand by Cyrus Mistry for directorship on the board of Tata Sons. The Mistry family currently owns 18% stake in Tata Sons and according to Ratan Tata, the Mistry group had been demanding disproportionate benefits and representation in Tata Sons. Tata even called this a calculated strategy orchestrated by Cyrus Mistry.

Mistry is fighting a court battle against Tata Sons since September 2016 over his ouster from the Tata group. Mistry has claimed that, being the largest single shareholder of Tata Sons, he was entitled to proportional board representation. While Mistry was removed on grounds of performance, Mistry has called it pure vendetta from the Tata house.

Tata even pointed to the reckless allegations made by Cyrus Mistry against him and the Tata group. Tata has maintained that such actions were indicative of the capacity of Mistry to run a smear campaign against the Tata group and the brand name. Tata has argued that Tata Sons was not obligated to give representation to under any contractual obligation.

The Mistry has been trying to give a new twist to this debate by calling the relationship between the Tatas and the Mistry family as being a Quasi Partnership. Hence, they argued that this relationship of trust goes beyond the written word of contracts. However, the Tatas have denied any such possibility.

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