Ratan Tata might have discarded Cyrus Mistry as chairman of his 148-year-old household empire, however will discover it more difficult to expunge the ex-manager’s allegations that his acquisitive practices and absence of focus on returns have actually damaged billions of dollars in investor worth.
Tata Sons turned down the allegations of Mistry as unwarranted. Mistry laid out in a 5-page letter to the board alleging Ratan Tata of backseat driving while in retirement and of preventing his drive to restructure and refocus the company.
Tata has started a four-month search for a new chairman, and whoever lands the task will undoubtedly deal with the very same obstacles that Mistry felt he was not able to deal with because, he accused, he did not have the support of a board that he stated responded only to Ratan Tata.
“Exactly what was 10-15 years ago – a Tata group that was a paternalistic conglomerate with over 100 companies ambling along – no longer works,” stated Shriram Subramanian of InGovern, a shareholder advocacy group.
“Investors require reassurance that the Tata operating business are truly working to improve investor worth instead of acting upon the whim of one person.”
The inbound chair likewise deals with possible regulative probes after Mistry accused an overall breakdown in business governance, and stated a “realistic assessment” of the group’s portfolio would need $18 billion in writedowns.
