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MUMBAI: It was a sombre Sunday.\n
A day before the Tata Sons<\/a> board met on Monday, Harvard Business School dean Nitin Nohria met Cyrus Mistry for more than two hours where he conveyed a message from Tata Trusts<\/a> Chairman Ratan Tata about what might come up for discussion at the meeting.
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On Monday evening, the Tata Sons board’s announcement took everyone by surprise, but the die had been cast some months ago. On August 26, the board was expanded by inducting Piramal Enterprises Chairman Ajay Piramal<\/a> and TVS Motor Chairman Venu Srinivasan<\/a>. The appointments were seen as a move to tighten the grip of Tata Trusts over the Tata Sons board chaired by Mistry.
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\nSources said Mistry was not even consulted on these appointments, reflecting the simmering discontent between Tata Trusts and the chairman.
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\nThe philanthropic trusts — including the larger ones like Sir Dorabji Tata Trust and Sir Ratan Tata Trust — together control about 66% of Tata Sons, the group holding company that was created by the families of the sons of founder Jamsetji Tata, and are still largely under the family’s grip.
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\nThis in many ways was payback time, felt Tata Group watchers. Just two months ago, in June, Mistry had cleared Tata Power’s $1.4-billion acquisition of Welspun’s solar farms without seeking approval from either Tata or other key shareholders.
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\n“Tata Power is a cash guzzler but generates very little profit. Yet, when it’s embarking on its biggest buyout, a principal shareholder is kept in the dark. That’s unprecedented in Bombay House (Tata Group headquarters),” said an old-time group insider.
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\nIn 2011, when Ratan Tata cherry-picked Mistry, it was seen as the victory of youth. “Be your own man”, was Tata’s advice to his then 43-year-old successor.
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\nBut soon, youth was perceived as insolent, precocious and out to destroy “the core values that the group stood for, for close to 148 years.”
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\nTake, for example, the centenary celebrations of Shapoorji Pallonji two years ago. According to a leading industrialist, while everyone from India Inc was invited to the event at the National Centre for the Performing Arts, Ratan Tata was not to be seen. He was, in fact, dining at Thai Pavilion with Cyrus’ first cousin. To many, it looked odd, since Tata should have been a part of the celebrations.
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\nThere was a fundamental disconnect between Mistry and Tata, particularly with regard to ethos, values, vision and the direction that the group was headed in. Detailed letters were sent to Mistry asking him to spell out his vision, five-year plan, etc, but the responses were vague and non-specific. Things got aggravated as the chairman of Tata Sons and Tata Trusts were not the same individual. The former was not a Tata family member but represented the single largest shareholder while the latter was custodian of a century old legacy. \"Confrontation was inevitable,\" felt a Mumbai based CEO of a global investment bank who has been working closely with the Tata Group for over two decades.
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\nSeveral of Mistry’s decisions, including the disposal of some of Indian Hotels Co’s overseas properties and especially the move to shut the UK steel operations, did not go down well with Tata Trusts. Many were considered Ratan Tata’s legacy that helped the group revenues top $100 billion even if it left the group hamstrung with ballooning debt burden. Mistry’s war on the legacy of the old guard, and the comment about the necessity of ‘tough love’ within the organisation was considered overtly aggressive and unnecessary.
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\nTata Trusts were of the view that the group under Mistry had not been able to take into account the sensitivity of shareholders as well as the global ecosystem in which the group companies operate. “Tata Steel could have been handled better and blunt decisions could have been avoided,” a person close to the development said. The move to shut the UK steel business had come in for heavy criticism in Britain.
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\n“Tata was unhappy with the decision to shut down or sell the group’s steel business in Europe,” said a person close to Tata. “He wanted the group to turn around the loss-making business rather than sell it.”
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\nSimilarly, the decision to get embroiled in a high-decibel, full-blown legal battle with NTT Docomo and challenge the $1.2-billion international arbitration court’s order that went against it was seen as breach of faith by many Tata old-timers. “Tata had made a promise to Docomo that he’ll protect their investment in India. Come hell or high water, it would have been fulfilled. It’s about the spirit over subject here,” added another old Tata executive on condition of anonymity. Matters had come to such a pass that Tata himself met the Japanese ambassador to India in Mumbai in August, requesting a diplomatic intervention. But his efforts were scuppered by Mistry’s continued belligerent stance.
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\nTata’s sub-scale telecom operations are a classic case of Mistry’s centralised micro-management, a direct fallout of which was the collapse of negotiations with Vodafone, even after the senior leadership from both sides got personally involved.
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\nMails to Tata Sons, Nitin Nohria and Lord Kumar Bhattacharyya did not generate a response.
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\nThe earliest signs of strain between Tata and Mistry were evident when he sacked Indian Hotels managing director Raymond Bickson in 2014. Bickson, perceived to be close to Tata , was replaced with Hyatt veteran Rakesh Sarna. Matters worsened when Mistry continued with Sarna despite alleged complaints against him.
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\n“Mistry’s eye for talent is also being questioned. The people he has hired are not inspirational leaders, just individuals,” said a former Tata Motors executive. But the crucial post of the Group CFO remained vacant for almost 3 years after the retirement of Ishaat Hussain.
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\nThe creation of the Group Executive Council (GEC) as Mistry's main brain trust had upset many in Tata Sons who perceived it as a parallel power centre. Only a handful of its members had actual operational experience of running a business. Most of Mistry’s key advisers, including Madhu Kannan, NS Rajan, Nirmalya Kumar, were also shown the door along with him.
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\nMistry’s critics point out that he did not relinquish his Irish citizenship though as Tata Sons chairman he should have. Concerns were also voiced about conflict of interest regarding award of contracts to construction companies of the Shapoorji Pallonji Group even after Mistry took over. This, many feel, gave more ammunition to Tata Trusts to strike back.
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\nAt a stormy Tata Sons board meeting on Monday, other than Ishaat Hussain and Farida Khambata who abstained, the rest voted for the chairman’s ouster. Mistry himself voted to stay. But since early afternoon, WhatsApp messages to senior Tata employees talked of a big-bang announcement. Meanwhile, most of the Group Executive Council members abruptly left an in-house event, adding to speculation, said company officials.
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\n\"But in the end it was a coup that was planned to perfection and executed to the tee,\" quipped an old Tata hand.
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\n(Additional reporting by Devina Sengupta, Rica Bhattacharyya & Sneha Shah)<\/em>\n\n<\/body>","next_sibling":[{"msid":55042510,"title":"Department of Post tweaks tender to woo tech companies for payment bank","entity_type":"ARTICLE","link":"\/news\/department-of-post-tweaks-tender-to-woo-tech-companies-for-payment-bank\/55042510","category_name":null,"category_name_seo":"telecomnews"}],"related_content":[],"msid":55042571,"entity_type":"ARTICLE","title":"Behind the scenes: What led to Cyrus Mistry ouster","synopsis":"\"Tata Power is a cash guzzler but generates very little profit. Yet, when it's embarking on its biggest buyout, a principal shareholder is kept in the dark.\"","titleseo":"telecomnews\/behind-the-scenes-what-led-to-cyrus-mistry-ouster","status":"ACTIVE","authors":[{"author_name":"Baiju Kalesh","author_link":"\/author\/1805\/baiju-kalesh","author_image":"https:\/\/etimg.etb2bimg.com\/authorthumb\/1805.cms?width=100&height=100&hostid=268","author_additional":{"thumbsize":false,"msid":1805,"author_name":"Baiju Kalesh","author_seo_name":"baiju-kalesh","designation":"Correspondent","agency":false}},{"author_name":"Kala Vijayraghavan","author_link":"\/author\/4411\/kala-vijayraghavan","author_image":"https:\/\/etimg.etb2bimg.com\/authorthumb\/4411.cms?width=100&height=100&hostid=268","author_additional":{"thumbsize":false,"msid":4411,"author_name":"Kala Vijayraghavan","author_seo_name":"kala-vijayraghavan","designation":"Editor","agency":false}},{"author_name":"Arijit Barman","author_link":"\/author\/16028\/arijit-barman","author_image":"https:\/\/etimg.etb2bimg.com\/authorthumb\/16028.cms?width=100&height=100&hostid=268","author_additional":{"thumbsize":true,"msid":16028,"author_name":"Arijit Barman","author_seo_name":"arijit-barman","designation":"Journalist","agency":false}}],"Alttitle":{"minfo":""},"artag":"ET Bureau","artdate":"2016-10-25 08:36:41","lastupd":"2016-10-25 08:39:24","breadcrumbTags":["industry","Tata Sons","Venu Srinivasan","Ajay Piramal","Tata Trusts","People movement"],"secinfo":{"seolocation":"telecomnews\/behind-the-scenes-what-led-to-cyrus-mistry-ouster"}}" data-authors="[" baiju kalesh","kala vijayraghavan","arijit barman"]" data-category-name="" data-category_id="" data-date="2016-10-25" data-index="article_1">
孟买:这是一个忧郁的星期天。一天前塔塔的儿子董事会周一见面,哈佛商学院(Harvard Business School)院长Nitin Nohria遇到居鲁士Mistry了两个多小时,他传达了一个消息塔塔信托董事长拉丹·塔塔什么可能会在会议上讨论。
周一晚上,塔塔的儿子董事会公告出乎所有人的意料,但已经把几个月前死去。8月26日,董事会被诱导Piramal扩大企业董事长Ajay Piramal和电视汽车董事长斯里尼瓦桑举止文雅。任命被视为将加强对塔塔的塔塔信托儿子Mistry主持。
消息人士称Mistry甚至没有咨询这些任命,反映塔塔信托和主席之间的激烈不满。
慈善信托基金——包括更大的像塔塔先生Dorabji信任和Ratan Tata先生相信——一起控制约66%的Tata Sons,该集团控股公司是由创始人的儿子的家庭Jamsetji塔塔和仍然很大程度上是在家庭的控制。
这在很多方面是回报的时候了,塔塔集团的人士。仅仅两个月前,在6月,Mistry清除塔塔电力的1.4美元收购Welspun的太阳能农场没有塔塔或其他关键股东的批准。
“塔塔电力是一个现金酒量大的人但产生很少的利润。然而,当它开始最大的收购,主要股东是蒙在鼓里。在孟买,前所未有的房子(塔塔集团总部),”一个说的内幕。
2011年,当Ratan Tata择优Mistry,它被视为青春的胜利。“自己的男人”,是塔塔的建议他当时43岁的接班人。
但是很快,年轻人被认为是无礼的,早熟和摧毁”集团代表的核心价值观,接近148年了。”
例如,纪念两年前沙普尔吉-帕隆吉公司的庆祝活动。根据著名实业家,尽管每个人都从印度公司应邀出席在国家大剧院,Ratan Tata没有看到。实际上,他是在泰国餐厅馆居鲁士的表妹。对许多人来说,这看起来很奇怪,因为塔塔应该是庆祝活动的一部分。
Mistry和塔塔之间基本脱节,特别是关于精神,价值观,愿景和集团正朝着的方向。详细的信被送到Mistry要求他阐明愿景,五年计划,等等,但模糊和非特异性反应。事情变得加剧——塔塔集团的主席和塔塔基金并不是同一个人。前不是塔塔家族成员但代表单一最大股东,而后者是保管一个世纪古老的遗产。“冲突是不可避免的,”觉得基于孟买的全球投资银行的首席执行官一直与塔塔集团密切合作了超过二十年。
Mistry的一些决策,包括处理一些印度酒店公司的海外属性,特别是移动关闭英国钢铁业务,与塔塔信托进行的并不顺利。许多人认为Ratan Tata的遗产,帮助集团收入超过1000亿美元,即使它离开集团手脚不断膨胀的债务负担。Mistry的战争遗留的老后卫,和评论“严厉的爱”的必要性在组织被认为是明显积极的和不必要的。
塔塔信托认为集团Mistry未能考虑股东的敏感性以及集团公司的全球生态系统操作。“塔塔钢铁可以更好的处理和钝的决定本来是可以避免的,”一位知情人士表示。此举关闭英国钢铁业务在英国受到了严厉的批评。
“塔塔是不满的决定关闭或出售该集团的钢铁业务在欧洲,”一位知情人士表示:塔塔。”他希望集团扭转亏损的业务而不是卖掉它。”
同样,决定卷入了高调,成熟的法律战NTT Docomo和挑战1.2美元国际仲裁法院的命令,去反对它被视为由许多老塔塔人背信。“塔塔已经承诺Docomo在印度,他会保护他们的投资。不论如何,已经实现了。它的精神主题,”另一个补充说老塔塔高管不愿透露姓名的。事情已经发展到这步田地,塔塔自己会见了日本驻印度大使8月在孟买,请求一个外交干预。但他的努力被Mistry的持续破坏了好战的姿态。
塔塔的偏小的电信业务的经典案例Mistry的中央集权的微观管理,直接影响谈判与沃达丰的崩溃,即使在双方高层领导亲自参与。
寄到塔塔的儿子,诺里亚和主Kumar Bhattacharyya不产生一个响应。
最早的塔塔和Mistry之间紧张的迹象很明显,当他解雇了2014年印度酒店董事总经理雷蒙德·比克森。比克森被认为是接近塔塔,凯悦资深Rakesh Sarna所取代。问题恶化时Mistry继续Sarna尽管所谓投诉他。
“人才Mistry的眼睛也遭到了质疑。他雇佣的人没有鼓舞人心的领导人,仅仅个人,”塔塔汽车(Tata Motors)前高管说。但该集团首席财务官的关键职位仍空缺近3年退休后Ishaat侯赛因。
组的创建执行委员会(GEC) Mistry的主要智囊团在Tata Sons打乱了很多人认为这是一个平行的权力中心。只有少数的成员已运行一个业务的实际操作经验。Mistry的大多数关键顾问,包括Madhu Kannan, NS Rajan, Nirmalya Kumar也显示门跟着他。
Mistry的批评者指出,他并没有放弃他的爱尔兰公民尽管Tata Sons主席他应该。也表示担心利益冲突有关的建筑公司合同的沙普尔吉-帕隆吉公司集团即使Mistry接管。很多人觉得,这给塔塔信托还击更多的弹药。
周一在一个暴风雨的Tata Sons董事会会议,除了Ishaat Hussain和Farida Khambata谁投了弃权票,其余投票支持主席的下台。Mistry自己投票决定留下来。但由于下午早些时候,WhatsApp高级塔塔员工谈到大爆炸的消息公告。与此同时,大多数的组织执行委员会成员突然离开内部事件,增加投机,公司官员说。
”但最终是一场政变计划完美和三通,执行“打趣道:老塔塔的手。
(附加报告Devina森古普塔,黎加Bhattacharyya & Sneha Shah)
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