said Mistry ?misled? the Selection Committee
set up in 2011 for selecting a Chairman of Tata Sons
to succeed Ratan Tata, by ?making lofty statements about his plans for the Tata Group and more importantly indicated an elaborate management structure for managing the Tata Group, given its diversity of business, by suggesting a management structure aimed at dispersal of authority and responsibility?. ?These statements and commitments from Mr Cyrus Mistry
played an important role in the Selection Committee?
s final selection of Mr Mistry as Chairman. After waiting for a period of four years, almost none of these management structures and plans have been given effect to. Clearly, in our opinion, the Selection Committee
was misled in its choice of Mr Mistry,? it said.
It charged Mistry of ?inappropriate? conduct by retracting from his promise to distance himself from his family enterprise ? Shapoorji Pallonji & Company to create ?a sense of breach of trust? and posing ?significant challenge to the high corporate governance principles Tata Sons
?This retraction, created grave concerns on Mr Mistry?s ability to lead the Tata Group devoid of personal conflicts and put to risk the high standards of self-less governance, that lies at the core of the Tata philosophy,? it said.
Mistry, it said, had over the past three-four years concentrated all power and authority only in his own hands as Chairman in all the major Tata Group operating companies and ?gone about systematically diluting the representation of Tata Sons
on the Boards of various Tata Companies.?
Mistry took advantage of the ?free hand?
and trust ?to weaken management structures in Tata Companies acting contrary to his fiduciary duties,? Tata Sons
said in the appeal to shareholders.
said its Board has been concerned for some time about the financial performance as the holding company?s dividend income (other than from TCS) declined continuously and staff costs more than doubled.
?All this would have resulted in losses but for the TCS dividend. Mr Mistry did not show concern about these issues and the increasing dependence of Tata Sons
on TCS. The Board could not accept this any further as it had the potential to risk the financial viability of Tata Sons,? it said.
Taking strong objection to Mistry's latest letter to the shareholders on corporate governance, Tata Sons
said the Tata Group has functioned for 149 years and set standards of corporate governance all through this period.