Boardroom Battles at the Tata Group
About Tata Group
Tata Group is a software to coffee conglomerate that is one of the biggest corporate houses in India. The Tata Group is not the byproduct of a growing Indian economy. Rather they have withered several storms since they have started a business from 1868. They are a pre-independence era legacy business house, perhaps one of the oldest that India has! Their businesses span every walk of life, and the company has over $120 billion in assets and employs close to 0.6 million people.
The sheer scale of Tatas business makes it an organization that is closely watched by the media. In the previous month, Tata group provided a lot of fodder to the media as it became part of a much-publicized boardroom battle. This battle ended with the ouster of the incumbent Chairman, Cyrus Mistry.
Cyrus Mistry had just taken the reins from the legendary Ratan Tata 4 years ago. He was part of the group that set out to find Ratan Tatas replacement. However, the board liked Mistrys suggestion so much that they appointed him as the successor. Barely 4 years after being anointed as the Chairman, Mistry was ousted from his job in a very public and humiliating way. This caused Mistry to pen down a 5 page, 2100 word letter which included several accusations. Some of the accusations are as follows:
Cyrus Mistry argued that the Tata Group had made several bad decisions and were trying to cover them up. He believed that the fair value of the company was $18 billion less than what was being stated. In other words, he argued that the Tatas may have to take an $18 billion write-down over the years! The following reasons were given to justify the argument:
The Counter Accusations
Tata group has traditionally been media shy. This public battle has dropped the peoples trust in the ethical dealings at Tata and Sons. It has also lessened the halo around the groups promoter i.e. Ratan Tata.
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