- National Company Law Appellate Tribunal decides to re-appoint Cyrus Mistry as chairman of Tata Sons
- Election funding was the first issue on which Ratan Tata expressed his unhappiness with Mistry.
The National Company Law Appellate Tribunal has decided to re-appoint Cyrus Mistry as chairman of Tata Sons. The tribunal said in its decision on Wednesday – it was illegal to remove Mistry from the post of chairman of Tata Sons. Tata Sons has the option to appeal against it. Even before this legal battle, there were issues about which there were differences between Mistry and Ratan Tata.
First issue: Rs 10 crore election funding
Election funding was the first issue on which Ratan Tata expressed his unhappiness with Mistry and his team. In 2014, a close advisor to Mistry proposed a donation of Rs 10 crore in the Odisha assembly elections. It was argued in its favor that Tata has large iron ore reserves in the state. The board members objected to this from Ratan Tata. He said that the Tata group has always been funding the Lok Sabha elections. This is done through trust only. Although the proposal to donate to Odisha did not pass, Ratan Tata objected to the proposal. He said that Cyrus Mistry knew that this would hurt the reputation of the group.
Second issue: tender of 60 thousand crores for army
According to a board member, this year the Tata group put up two tenders, in which 2,600 modern light combat vehicles were to be purchased for the Indian Army at a cost of 60 thousand crores. Tata Strategic Equipment Division (SED) floated tenders with Titagarh Wagons and Tata Motors as a joint venture with Bharat Forge. Ratan Tata said – one tender should have been put instead of two, because two different tenders are mocking the name of the Tata group. However, the Army has not yet decided on the tender.
Third: Agreement with American food chain
There was a rift between Ratan Tata and Cyrus Mistry over the American food chain. A proposal for an agreement with American food chain ‘Little Caesars’ was brought to Tata Sons’ board meeting. Ratan Tata became very uncomfortable with bringing such a small issue to the board. He said- when there are other people present in the company to take a decision in such cases, there was no need to bring it before the board. Such a move tarnishes the company’s reputation. Cyrus Mistry’s close associates said that when Tata had entered into an agreement with another coffee chain, Starbucks, there was nothing wrong in bringing such a case to the board.
Apart from these three cases, differences between Tata and Welspun joint venture Tata-Docomo mobile service with Japan and Ratan Tata’s decision to discontinue the Dream Project Nano car also widened the distance between the two.