India's Tata group accuses ousted chairman of malice

Thu Oct 27, 2016 12:16pm EDT
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By Aditi Shah and Promit Mukherjee

NEW DELHI/MUMBAI (Reuters) - Tata Sons accused its former chairman, Cyrus Mistry, of making "unsubstantiated claims and malicious allegations" against the Indian conglomerate as the gloves came off in a bitter and highly public row over his sacking earlier this week.

The acrimonious exchanges have prompted aides to Prime Minister Narendra Modi to urge restraint in a dispute that could sully the reputation of one of India's oldest and most respected business houses. Tata Sons has had only six chairmen since it was founded in 1868, growing into a $103 billion international group spanning cars, steel and information technology.

Mistry's parting shot, in a blistering 5-page letter written after he was ousted in a boardroom coup late on Monday, accused the company of failures of governance that he said had destroyed billions of dollars in shareholder value.

He also alleged inappropriate interference by Ratan Tata, the 78-year-old patriarch who hired him and has come out of retirement to run the business in a caretaker role.

Tata, in an 8-paragraph statement on Thursday, dismissed Mistry's claims.

"The correspondence makes unsubstantiated claims and malicious allegations," Tata Sons said in the statement emailed to reporters a day after Mistry's letter was leaked to the press. "These will be responded to in an appropriate manner," the company said without elaborating, raising the prospect that the war of words could lead to a legal battle.

The country's two largest stock exchanges demanded clarity from Tata's more than two dozen listed units in what could herald scrutiny over why investors were not told of Mistry's concerns earlier.

The Securities and Exchange Board of India (SEBI), the capital markets regulator, is looking into whether Tata Sons flouted corporate governance rules, as Mistry alleges in his letter to the board, two people familiar with the matter told Reuters.   Continued...

Cyrus Mistry, chairman of Tata Group, smiles during the Tata Consultancy Services Ltd. (TCS) annual general meeting in Mumbai June 27, 2014. REUTERS/Stringer