Cyrus Mistry was made chairman because there was no alternative: Tata Sons

MUMBAI: In a stinker against the way Mistry performed in the past four years , Tata Sons issued a statement detailing where all he went went wrong. One section of the statement was on how Mistry was selected and how he “dismantled” the group.

The statement says – ‘After 4 years, it is unfortunate that hardly any of the his views in the management structure was implemented’. It also says how the 100 year old group saw its group structure being “dismantled so that the operating companies are drifting farther away from the promoter company and their major shareholder (except for periodic presentations ) through systematically reducing the effective control and influence of the promoter’.

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The statement of Tata Sons says how in the past the group had influenced companies through its directors and shareholding pattern. This added to the ‘creditworthiness’ and ‘credibility’ till the new chairman came in.

“We now have an unacceptable new structure where the chairman alone is the only common Director across several companies and this situation could not be allowed to go on”, said the statement from Tata Sons.

It also mentions on the conflict of interest between the Shapoorji Palonji group that were not addressed. S&P owns 18.4%of Tata Sons.

The statement also says how the selection committee made Mistry the chairman. “Its original objective was to look for a person with the experience of running large (and preferably diverse) businesses with considerable international exposure and other criteria,” said the statement.

Mistry was made the chairman because he ‘managed and gave a comprehensive management structure with details of the composition and objectives of each component of the structure. This fitted with the views of the Committee and having failed to find an alternative candidate, the Committee decided to recommend Mr. Mistry partly because of his recorded views and plans and also his association with the group,’ added the statement.