Cyrus Mistry's Aggressive Email Takes Tata Battle (Even More) Public
Exchanges asked Tata companies to clarify about their financial status Some companies have already submitted their reply to the exchanges Mr Mistry in a letter warned 5 companies can erode $18 billion of value
Cyrus Mistry's email to the board of Tata Sons has stunned not just corporate India but social media with its outlining of governance failures, poor decisions and looming writedowns at one of the country's most revered conglomerates.
Mr Mistry's parting shot (he was fired on Monday as Chairman) is five pages long.
The country's two largest exchanges, citing the leaks, have demanded clarity from Tata's 27 listed units.
At least one unit, Tata Steel dismissed talk of writedowns. But shares in all of the group's major listed companies fell on Thursday.
Public confrontations of this nature are rare in India Inc and the shock value of Mr Mistry's mail lies partly in the international renown of Ratan Tata, who has temporarily taken back the helm of the parent group.
"It has taken everyone by surprise. Nobody would have thought such things could happen at Tata," said J. N. Gupta, a former executive at India's markets regulator and now managing director at Stakeholders Empowerment Services.
Lawyers, analysts and headhunters cautioned the letter could be the start of a bitter legal battle - but was already a warning to any willing candidates on challenges ahead in running a sprawling and complex group.
"Any candidate that is now in the race or is considered, will pull up and refer to the letter from Cyrus Mistry," said Suresh Raina, managing partner, Hunt Partners, an executive search firm.
Mr Mistry, chairman of Tata Sons since 2012, argued that Mr Tata acted as an alternative power centre after officially handing over the reins.
He has also alleged misgovernance, stating that Tata Motors extended credit too easily to fuel sales and that when fraudulent dealings surfaced at AirAsia India, they were not acted on fast enough.
Mr Tata's lawyer, Abhishek Manu Singhvi, told NDTV, "It's unfortunate that this kind of linen is sought to be washed in public."
Yet governance experts said Tata would need to tackle the allegations, for which Mr Mistry provides no proof. His email was leaked after he was accused by several sources and lawyers close to Mr Tata of allowing the group's fortunes to slide and of injudiciously selling major assets that had been acquired by the group's patriarch.
