Tata group’s interim chairman Ratan Tata leaves Bombay House after meeting with Board members in Mumbai on Tuesday. (Photo: Asian Age)
Tata group’s interim chairman Ratan Tata leaves Bombay House after meeting with Board members in Mumbai on Tuesday. (Photo: Asian Age)
The surprise removal of Tata Sons’ chairman Cyrus Mistry and his advisory team, and the temporary return of family patriarch Ratan Tata, may distract the salt-to-software conglomerate from its efforts to trim debt and reshape some of its businesses.
The boardroom shuffle, announced late on Monday, sent shares in some of Tata’s listed companies lower on Tuesday, although the reinstatement of the widely respected Ratan Tata as interim chairman helped ease investor concerns.
“When Mistry was there some actions were being taken at a group level which would have helped reduce the company’s cash drain activities,” said Daljeet Singh Kohli, research head at broker IndiaNivesh.
“There was hope that rational, rather than more emotional decisions would prevail.”
Uncertainty at Tata may stall some ongoing initiatives, such as the search for a partner for Tata Steel’s struggling UK assets, some analysts say.
Under Mistry, Tata “have taken significant steps towards deleveraging and better utilization of capital,” Citigroup said in a client note on Tuesday, adding his absence may impact the group’s future strategy and delay the “process of deleveraging.”
Media reports following Mistry’s ouster suggest the influential Tata family was unhappy with some of his decisions as chairman.
Both Ratan Tata and the Tata Trust were kept in the dark on a number of sensitive issues, said a person with knowledge of the matter, and attempts to sell Tata Steel’s UK business and an aggressive stand against NTT DoCoMo proved “the last straw”.
All eyes on Strategy Under Mistry, Tata Sons ‘has taken significant steps towards deleveraging and better utilization of capital,’ Citigroup said in a client note on Tuesday, adding his absence may impact the group's future strategy and delay the ‘process of deleveraging.’
The Tata Sons Board on Tuesday inducted Dr Ralf Speth, CEO of Jaguar Land Rover, and Mr N. Chandrasekaran, CEO & managing director of Tata Consultancy Services (TCS), as additional directors. Mr Ratan Tata, Interim chairman of Tata Sons, said, “This is in recognition of their exemplary leadership in their companies.”
The Pallonji group issued a statement saying, “Tatas have filed caveats seeking notice from Cyrus Mistry fearing legal action. Cyrus has not filed any caveats. He has already made a statement that such concerns are misplaced at this stage”
Tata filed caveats in the Supreme Court, the Bombay High Court and the NCLT
