The stakes in the Bombay House corporate battle have escalated, with accusations exchanged by Tata Sons and Cyrus Mistry now spilling over into misrepresentations, breach of corporate norms, and alleged involvement in the Rs 3,600-crore AgustaWestland chopper deal scandal.
Mistry, the former group chairman who is now battling his unceremonious ouster, has alleged that Vijay Singh — Tata Trusts nominee on Tata Sons — was a key government official when the chopper contract was awarded to the Italian company.
The Tatas, on the other hand, charged Mistry with breaching governance norms and misleading them when a panel empowered to select the group chairman approached him in 2011.
Denying Mistry’s allegations, Singh said the chopper contract was approved by the cabinet after his retirement. “To connect me with AgustaWestland is slanderous and malicious,” he told PTI.
While the charges levelled by Mistry on Sunday are yet to be examined, the $103 billion Mumbai-based conglomerate is now gearing up for the next phase of the battle. Both the sides are wooing shareholders ahead of an extraordinary general meeting slated for next week, when a resolution on voting out Mistry will be taken up.
Mistry’s office responded to Tata Sons’ appeal to shareholders with a scathing late Sunday statement.
“It’s amusing to see Vijay Singh concoct theories to defend his role in Ratan Tata’s conspiracy to replace Mr Cyrus Mistry,” it said, going on to mention Singh’s track record as the chief secretary in the Madhya Pradesh government in 2006 and later as the defence secretary when the AgustaWestland contract was awarded.
Executives from Mistry’s office did not elaborate on the charges.
Tata Sons led its charge with an allegation that Mistry had breached governance norms. “When Mr Mistry was appointed as the executive vice-chairman in 2011, he was informed that he should distance himself from his family enterprise – Shapoorji Pallonji & Company – and other Shapoorji Pallonji group entities by putting his shareholding in an arms-length trust. Mr Mistry agreed, but retracted his position after some time. Such conduct was inappropriate, and created a sense of breach of trust on his part.”
Incidentally, capital markets regulator Sebi is already monitoring the charges traded by both sides.
Tata Sons also cited a governance guidelines framework introduced by Mistry in 2015, which stipulated that all employees of a group company must resign from its boards as soon as their employment ceases. “Therefore Mr Mistry – upon ceasing to be the executive chairman of Tata Sons – should have immediately resigned from the boards of all the other companies under his own guidelines. Yet he has chosen not to do so, in wilful breach of the governance guidelines framework,” it said.