Cyrus Mistry Violated Tata Ethics, Ignored Most Companies: Tata Group

Mumbai: Senior trustees at Tata Group reveal that Cyrus Mistry had cut the link between the charitable trusts and corporate firms. In reality, charitable trusts own the Tata Group. Going against charitable trusts and focusing only on cash cows was the major mistake done by Cyrus Mistry, observe senior trustees and officials at Tata Group. VR Mehta, a trustee of the Sir Dorabji Tata Trust, said that the Tata Group's sagging financials were a key reason behind the removal of Cyrus Mistry as Chairman of Tata Sons.

NDTV carried a story stating charitable trusts hold over 60 per cent share in the giant Tata Sons, giving them a strong say in the running of Tata Group's affairs. In an interview to NDTV, Mehta said the first by any serving Tata trustee, Mehta said that under Mistry's term, the entire group was dependent on only two companies, Tata Consultancy Services and JLR (Jaguar Land Rover). Mistry was downsizing the philanthropic activity of Tatas, for which Trustees took it very serious.

Mehta also observed the deviation from Tatas ethics during the term of Mistry. Adding to this, the legal battle in which the Tata's found themselves against their telecom partner, DoCoMo, also further damaged Mistry's reputation. Tatas eventually lost this legal battle and are facing a hefty $1.2 billion penalty.

Mehta said that The DoCoMo case was against the philosophy and ethics of Tatas. The legal issue could have been dealt with more finesse. He also pointed to a breakdown between the Trusts and the Tata Group since Mistry took over.

After Mistry taking over as Chairman of Tata Sons, Ratan Tata remained as the Chairman of the Trusts. However, there was no link between the Trust and Tata Sons. Ratan Tata and Cyrus Mistry used to meet and talk but somehow the concerns of the Trusts did not get adequately addressed, opined Mehta. All the trustees were not at all happy with this development. This turned the situation against Mistry. Trustees came to a conclusion that probably no choices were left, no options were left other than to remove Cyrus Mistry.