The Tata-Shapoorji Pallonji fight is going to get uglier: Anil Singhvi, Ican Investment Advisors

In a chat with ET Now, Anil Singhvi, Ican Investment Advisors, says Ratan Tata after having taken a decision at the age of 75 to retire, must retire in every respect.

Edited excerpts


Markets normally get a hint but that Cyrus Mistry is going to be kicked out no one knew this one was coming?

I think it was very sudden and very swift. I am getting into legalities of this. There are enough set of lawyers but my own concern is that the manner in which it was done, it leaves a lot to be desired from the house of Tatas. They are not known for these kind of disruptive practices. So it is going to leave a huge scar which was least expected from Tata Sons.

To put it simply, do you think rather than speculating and rather than trying to rely on any of the whisper mongering, any WhatsApp messages, do you think this is a simple fight between two of the larger shareholders of the Tata Sons?

Exactly. Let me speak my mind. There are three things which I look at. First, the legality of this whole issue, I am still not sure, I am not a lawyer but Ratan Tata was not even a board member of Tata Sons, if I am correct. So if you are not a board member how can he become a chairman, interim though it may be and interim for what period? He has very conveniently said four months. Last time, -- a similar kind of a committee and some members are common too – took more than 12 months and finally came up with Cyrus. So what is the guarantee that in four months’ time that you will have a new chairman?

The second issue is that Cyrus has also been chairman of the listed companies. Does it mean that by virtue of him not being a chairman of Tata Sons, he ceases to be chairman of all other listed companies too? Does the Tata Sons have this kind of a veto power that they can remove any time chairman of a listed company? And again he is not chairman of the board, mind you, he is chairman of the company and chairman of the company is the prerogative of the shareholders. He is not at the mercy of the board to be removed. So I think there are huge amount of challenges as I look at it, from legal nuances point of view also and definitely Mr Ratan Tata did all this in a hurry.

On Saturday, Cyrus was in Singapore. Something happened on Saturday or Sunday. Things do not move like this in corporate world that on a weekend something happens an you are out on Monday. And he is not caught in some fraud, he is not caught into some other moral turpitude of any nature and if that is the case please put it up on the public domain.

To say that stock market will take it in stride, share prices will not come down today is to much to expect. When he came in, he was hailed as the new man who was going to have 25-30 years and he was really going to charge the group. I think this whole story of whether the stock prices today go down or go up does not end here.

According to me, this is a very, very large fight which is going to get uglier by the day because as I put it colloquially, I think aapne malik ko galle se hata diya hai because he and his family owns 17-18% directly into Tata Sons and the trust. Again trustees are trustees, they cannot be running the businesses. Sorry for saying this, but Mr Ratan Tata after having taken a decision at the age of 75 to retire, you must retire, you must retire in every aspect and allow the man and here you have not appointed a person who is a professional, who just chucks his job like what you see in the West, here is a man whose family has a large stake or perhaps from individual, personal wealth point of view, largest stake.

So even if he is making a mistake, I think we all have made mistakes running our businesses, allow those mistakes to be made, allow those mistakes to be corrected rather than just do this kind of a thing and how demeaning it is for Cyrus, how reputational an issue this is for Cyrus, has anyone thought about it? You just constitute a committee comprising of same kind of people who took 12 months period in deciding and finally they came out and said Cyrus was the right man. Within four years, Cyrus is the wrong man and has to be removed by a day’s notice?