Tata, Mistry and NCLAT – The Battle Continues

23 Dec 2019  Read 1902 Views

Has Cyrus Mistry had the last laugh with Tata Group? How did all this unfold? What exactly happened with time that brewed bitterness between Ratan Tata and Cyrus Mistry?

Read and find out below

Since the Cyrus Mistry incident was reported in 2016, I have been imagining Mr. Ratan Tata as the Amitabh Bachchan of ‘Mohabbatein’ who constantly emphasizes on ‘Parampara, Pratishtha aur Anushaasan’ (Principle, Legacy and Discipline) of Tata Group.

Mr. Ratan Tata wouldn’t have imagined his post-retirement life in this way. Tata group has seen ups and downs during his tenure which he handled quite well. But, looks like he is facing more challenges post retirement.

NCLAT says “Surprise!”

After, everything done and dusted, the recent NCLAT order to reinstate Cyrus Mistry’s chairmanship is just another illustration of what we just said. Just imagine how Mr. Tata would be feeling as a head of the family that is taking court’s help to sort out personal issues.

Suddenly after three years, at a time when Chairman of Tata Sons N Chandrasekaran might have been planning for coming year’s strategy, NCLAT has said that dismissal of Mistry was ‘illegal’. NCLAT has also set aside the Tata Son’s decision to convert itself into a private company.

The Game of ‘Throne’

Tata vs Mistry has been discussed manier times since 2016 but here’s a gist of it. Tata Sons is made up of 2 main elements namely- Tata Trusts and SP Group (Shapoorji Pallonji Group). Here, Tata Trusts is the elder brother while SP Group is the younger brother based on stakes. The difference in their holding is vast (Approx. 18% for SP Group and rest for Tata Trusts).

Cut to year 2012. When Mr. Ratan Tata turned 75, he was already looking for an apt successor for Tata Group. The succession was not about enhancing profitability but maintaining the values instilled by him in the group. Bingo! He found Cyrus Mistry (son of Pallonji Mistry), to be the right fit. But, in 2016 he changed his mind looking at Mistry’s working style.

Message from N Chandrasekaran

Post reception of NCLAT order, incumbent Chairman of Tata Sons N Chandrasekaran had to first make sure that employees stay away from this as in, their work shouldn’t get affected. Therefore, he dropped an emotional message for the employees which said “Focus on your respective businesses”.

By the way, just think about the poor fellow (we don’t mean to say that exactly but looking at his condition, we just couldn’t resist). He would have joined Tata Group with so much ambition, thinking also about the job security. But, the destiny offered him twists and turns that too regarding an issue with which he wasn’t even remotely involved.

The Road Ahead

It’s winter folks! So, visibility on the road is an issue. But, bleakly there is a chance that this NCLAT decision might be overturned. We’re saying this because NCLAT has a track-record of getting its decisions overturned (6 out of 8 decisions have been overturned in past).

However, the bigger issue is with Tata Group as a whole, because they would have to figure out real quick that, who’s the leader? It still seems like a bad dream that a conglomerate which has set the standards for the Indian corporates is facing such leadership issues. And, for the ongoing situation, let’s see where it all ends.

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About the Author: Ratan Deep Singh | 146 Post(s)

Ratan is a Biotechnology graduate and a former print-media Journalist, who specialized in marketing to take up Brand Communication. He’s a grammar Nazi & big-time foodie who appreciates creativity and often tries his hand in creative poetic writing.

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