Ex-chairman of Tata Sons writes a letter to the board on 25th October at 10.05pm. This means the letter was written on the same day when he got fired from the company. The letter talks about how Cyrus Mistry has been wrongly portrayed by the media because of his dismissal. His dismissal hurts his and Tata Groups image.
The board has dismissed him without giving him an explanation/feedback or allowing him to challenge the board’s decision. Media talks about how the revenues have gone down and debt increases in Cyru’s tenure, but nobody knows that Cyrus has given Tata Chairman Crown along with serious problems in the company. Read Cyrus Mistry Fired.
IHCL (Indian Hotels Company Ltd), Tata Motors, Tata Steel Europe, Tata Power Mundra, and Teleservices alone had an increase in capital employed from 132,000 crores to 196,00 crores due to operation losses, interest and capex. This loss is more than the net worth of these companies. Acquisition of JLR and Tetly also left a huge debt hanging for Cyrus to tackle.
Ratan Tata encouraged joint ventures with Air Asia, and Singapore airlines and did not allow Cyrus to do his research before singing on them. Many a times this ex-chairman had to make tough decisions keeping in mind the interests of each and every board member. Despite all these challenges this ex-chairman was able to increase Tata Sons’s valuation by 14% when compared to 10% rise in BSE stock. Also net worth increased from 26,000 to 42,000 crores.
Tata search committee in 2011 approached Cyrus Mistry who was already running an established company. Cyrus declined the offer but when Tata’s search committee could not find a suitable replaced for Ratan Tata, they asked him to reconsider.
As per this letter, Cyrus Mistry was doing what a Chairman was supposed to do and has shown good results. According to this letter Cyrus suggested to shut down few loss making units to bring down operation costs but nothing was taken into consideration by the board. Tata Sons shouldn’t have dismissed this ex-chairman; they asked this man to reconsider in 2011 only because they believed in him. More time and freedom given to Cyrus could have reduced the debt and losses. Read more Business News.