New Delhi: The Tata Group’s sagging financials was a key reason behind the removal of Cyrus Mistry as Chairman of Tata Sons, says VR Mehta, a trustee of the powerful but low-key charitable trusts that own the Tata Group.
Mr Mehta is a member of the Sir Dorabji Tata Trust, which along with a clutch of other charities, have more than 60 per cent share in the giant conglomerate, giving them a strong say in the running of Tata Group’s affairs.
In an exclusive interview to NDTV, the first by any serving Tata trustee, Mr Mehta said that under Mr Mistry’s watch the entire group was dependent on only two companies – Tata Consultancy Services and JLR (Jaguar Land Rover).
He said this meant a downsizing of the philanthropic activities of the trusts, unacceptable to them.
Mr Mehta’s words explicitly illuminate the factors driving the dramatic change of guard at Tata Sons, a subject that has until now remained in the realm of off the record leaks and speculation.
He also critiqued a “divergence” in the ethos of the Tata Group under Mr Mistry’s watch, specifically the legal battle in which the Tata’s found themselves against their telecom partner, DoCoMo.
It is a battle the Tatas eventually lost, and now face a hefty 1.2 billion dollar penalty.
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Mr Mehta said, “It (the DoCoMo case) doesn’t fit with the philosophy and ethos of Tatas. Issues could have been dealt with more finesse.”
Mr Mehta also pointed to a breakdown between the Trusts and the Tata Group since Mr Mistry took over.
“After the regime changed, Mr (Ratan) Tata remained as the Chairman of the Trusts and Mr Mistry the Chairman of Tata Sons. There was no link (between the Trust and Tata Sons). Mr Tata and Mr Mistry used to meet and talk but somehow the concerns (of the Trusts) did not get adequately addressed,” Mr Mehta said.
He said he’s “not at all happy with this development. This looks very ugly, to say the least. But having said that, I would also add that probably no choices were left, no options were left (other than to remove Mr Mistry)”.