[swiftnfurious]

More masala to the current scene. I am not sure where is this going now. There are reports that Cyrus wouldn't pursue any court proceedings either. But, all the more news coming in his favour in the last couple of days as I notice.

Three of the four directors CNBC-TV18 spoke to said they were disconnected with the decision taken at Tata Sons and shocked by Mistry’s ouster.

The independent directors have said that Cyrus Mistry was an excellent Chairman and he always took a consultative approach.

http://www.moneycontrol.com/news/cnb...r_7882701.html

[volkman10]

the spat gets uglier.

Tatas will seek to oust Cyrus Mistry from group companies unless he quits.

Tata Sons, the holding company of the Tata Group, will move soon, possibly within a few weeks, to remove its former chairman Cyrus Mistry from the chairmanship and boards of various group companies.

Link

[drsingh]

The only conclusions to draw from this mess is that Cyrus was taking/going to take big decisions that pissed off the 'establishment' in different countries. They made their aggravations known to the Ratan Tata camp. Shutting down big employment industries like steel etc. The TATA group must have been offered some 'incentives' from the powers that be to change the 'management' to bring it more inline with 'policy goals'.

There is no performance based reason to affect change.This is definitely a strategic turn of events. And strategic decisions by definition are known to few and are made available down the hierarchy on a need to know basis.

The media circus is all noise for now.We will probably get to know the truth after a couple of years when the story is researched properly by a good investigative journalist. Or when the TATA group gets favourable treatment somewhere across the globe.

Can't really fault either party for sticking to their guns.Both sides are trying to deal with the situation according to their perspective of the world.

[DriverR]

Looks like Maruti Suzuki is using the Tata situation to get some shots in against the Nano.

Nano failed to meet customer aspirations in totality: Maruti Suzuki chairman

Maruti Suzuki India chairman R C Bhargava on Thursday said Tata Nano failed because it did not meet aspirations of car customers "in totality" and not because of just one or two factors.

He said when a two-wheeler buyer upgrades to buy a car, he looks at the luxury that a car offers and does not look at it as a mere means of transportation.
...
On future eco-friendly products, Bhargava said Maruti and Suzuki are working to develop a low-cost small hybrid car, without sharing any timeline for its possible launch.

[AutoNoob]

How Tata Sons fared during Mistry’s tenure
Source

Says a lot about his tenure.

[honeybee]

Originally Posted by DriverR

Looks like Maruti Suzuki is using the Tata situation to get some shots in against the Nano.

He was one of the first to laud Tata for launching the Nano. Also you will generally not find people from the automotive industry taking potshots at their peers like this. Remember no one from the automotive industry has publicly spoken against brazenly unethical acts by the VW group or GM India in the emissions scandal.

So I would take that comment as an honest and objective criticism.

[GrammarNazi]

EoD Ratan Tata & his new teams will also need to push the company ahead with foresight & intuition apart from just numbers.

Lets See.

Originally Posted by DriverR

Looks like Maruti Suzuki is using the Tata situation to get some shots in against the Nano.

Nano failed to meet customer aspirations in totality: Maruti Suzuki chairman

A pretty sensible person in this forum has a saying :
Retrospect is always the genius; it's foresight that really counts.


When Ratan Tata described his story about a family travelling unsafely in a 2 wheeler, I guess it was pretty clear that this would be utilitarian. And theres not much so very wrong if something is utilitarian.

Maruti back then too ridiculed this brave effort in such a deeply vile manner, it showed jealousy against Tata Motors, rather than envy as a business rival.

Godknows what kind of PR happened that the Nano fires were blown way way way out of proportion. Corporate sabotage isn't a thing thats never happened before.

And these comments come from a person who thinks "More safety features in cars will mean less road safety", more wisdom here.

[Sawyer]

The stand taken by the independent directors of Indian Hotels in their Board meeting yesterday is very encouraging IMO, in proving that they are truly independent.

Here is the very interesting question that it brings about - Indian Hotels is a public limited company, that has a MD, a Board and a Chairman, that happens to be Cyrus Mistry. The Board has - as must all Boards - independent directors on it. Indian Hotels itself is a large enough company and therefore able to attract and pay for all the management infrastructure it needs, from independent directors down to newly inducted trainees.

Why should Tata Sons then have any role to play in the management of Indian Hotels in a way that supersedes or bypasses this structure? What entitles, for example, the Chief Human Resources Officer of the " Tata Group", to have any say in the HR function of Indian Hotels? What gives Tata Sons the right to have a parallel management structure that seeks to oversee/control all management functions of Indian Hotels? If Tatas have any shares in Indian Hotels, what gives them the right to do things that other shareholders of Indian Hotels cannot do? I don't think this special privilege to one shareholder is contemplated anywhere in the Indian Companies Act.

And what applies to Indian Hotels, applies to Tata Chem, or to Tata Steel, or Tata Motors too, surely. And to TCS and the rest.

It will be very interesting to see how the independent Directors of these legal and supposedly autonomous entities behave in future, because they can be very powerful if they decide to live up to their name, and do what is right for the companies on whose Boards they sit. The right thing cannot just be pre decided in the favour of either Tata or Mistry. And if they act with propriety, it will devalue the whole position of "Group Chairman". And rightly so, IMO.

[AutoNoob]

Originally Posted by Sawyer

Indian Hotels is a public limited company, that has a MD, a Board and a Chairman, that happens to be Cyrus Mistry. The Board has - as must all Boards - independent directors on it...
Why should Tata Sons then have any role to play in the management of Indian Hotels in a way that supersedes or bypasses this structure? What entitles, for example, the Chief Human Resources Officer of the " Tata Group", to have any say in the HR function of Indian Hotels?...
And what applies to Indian Hotels, applies to Tata Chem, or to Tata Steel, or Tata Motors too, surely. And to TCS and the rest...

I don't know much about corporate board room functioning, so this is just my personal thought.

Tata Sons is having big shareholding in Indian Hotels and other Tata Group companies. Also, most of these big organizations were started by Tatas (through investments by Tata Sons or other entities). In such a scenario, there might be a legal agreement / tie-up where-in the role & authority of Tata Sons and its Trustees is pre-defined. If indeed such thing exists, there in not much that the individual boards of each of these companies can do. Now, whether such a control / over-sight is really required, it is debatable.

[Sawyer]

Originally Posted by AutoNoob

In such a scenario, there might be a legal agreement / tie-up where-in the role & authority of Tata Sons and its Trustees is pre-defined. If indeed such thing exists, there in not much that the individual boards of each of these companies can do. Now, whether such a control / over-sight is really required, it is debatable.

What you are talking about is exactly what was outlawed by the Companies Act in 1970 in India, the managing agency concept.

The only way that legally a company can be managed now is by the Board of Directors, and an MD, subject to the on going approval of shareholders.

If Mistry decides to stay and not surrender his position as Chairman in each company, and if independent directors and public financial institutions that have large shareholdings in these companies decide to be independent, then the Tata group as we know it is finished.

Who is to say that this is necessarily a bad thing? Many Tata companies are mediocre performers in the market place. For instance, which one is known in the market place of consumer goods for superior quality, consistently? Just one - Titan. And that is a legacy of Xerxes Desai, Ratan Tata has no claim on that exception except to be able to say - it is a Tata group company.

Each existing Tata group company will then have to be judged on its own performance and not survive on cross group subsidies. Why is that bad?

[deetjohn]

The Hindu reported the following in the paper today.

Originally Posted by The Hindu

The sources confirmed that Mr. Mistry was unlikely to step down as the chair of the group companies.

While Mr. Mistry has been removed as the chair of Tata Sons, he remains the chair or JLR, Tata Motors, Tata Steel among others. "He has been appointed to these positions and he wants to continue to make it a great institution."

Let's see how this pans out.

[Sawyer]

In fact, one could argue that one reason why Tata Motors isn't as nimble as it needs to be is because of the Tata group oversight that slows it down. Or because its employees are too secure in their jobs to do all it takes to meet customer expectations. Just saying that even if we deliver defective cars we do all it takes to finally make them work and therefore you should trust us, is no longer enough - that may have been a formula for success if employed in the days of Fiats and Ambassadors, not today.

Even something like the Taj Hotels which were once excellent. There was a time when they were clearly the best hotels in India, that everyone aspired to stay in. Not any more; customer expectations have moved on, and there are now many better hotels in India than those of the group.

More and more, the group looks like a dinosaur.

Originally Posted by deetjohn

Let's see how this pans out.

And here is the problem with the Mistry stand:
The objective of making companies ranging from Tata Steel to TML/JLR to TCS to Indian Hotels and so on, where he is the Chairman, excellent in their own field, can only be delivered by someone who knows all the drivers of excellence for the industry that each of the companies operates in.

Why is Mistry the superman that has this expertise?

Ironically, JRD Tata knew this - that he wasn't the superman that both Ratan Tata and Mistry now seem to think themselves to be. JRD never did back seat driving over people like Rusi Mody, Sumant Moolgavkar, Darbari Seth, Ajit Kerkar, or FC Kohli; respectively the people that made Tata Steel, Tata Motors, Tata Chemicals, Indian Hotels, and TCS to be what they are today. Or Xerxes Desai/Titan. JRD was never the banyan tree that does not allow anything to grows in its shade.

[Sawyer]

See:
http://profit.ndtv.com/news/corporat...ome-topstories

Now I don't know the man, but I have read his excellent book on marketing strategy, and based just on that, I don't think Tata's have covered themselves with glory here either. Just an arbitrary sacking for no justifiable reason except being able to get away with this behaviour.

PS: See this for more detail:
http://www.business-standard.com/art...0500119_1.html

Soon after the Mistry sacking, Tata announced that Prof Kumar has decided to leave the group to pursue other interests!

[rdhawan15]

As days pass, it seems clearer that Cyrus was talking all the correct steps to re-deem the Tata group and there was an attempt being made to cut him to size.

His decision to let go off the Tata Steel's Corus investments could have unsettled Ratan Tata into believing that Cyrus has started questioning the erstwhile writ of Ratan Tata. Most of Ratan Tata's acquisitions seem to be localized to British companies.

Cyrus Mistry's sacking as Chairman is more a result of ego issues than performance issues as Ratan Tata would try to make us believe. The larger than life persona of Ratan Tata has definitely taken a severe beating in the way he has conducted himself in this entire affair. It all seems to have been stage managed as he picked three of his own men as Directors of the company during the past 3 months to ensure that he could get the better of Cyrus.

Would you call Tata's management a professional lot? Stuff like Corporate Governance seem to be alien to the Tata's management. Loss of investor confidence, loss in brand equity and degraded employee morale are some of the by-products of this nasty coup planned and executed in the Tata Boardroom.

[NetfreakBombay]

Originally Posted by Sawyer

and if independent directors and public financial institutions that have large shareholdings in these companies decide to be independent, then the Tata group as we know it is finished.

Tata Son's holdings in each company is significant. They can call for a EGM and oust the board/chairman. A drastic step, but can be taken if required.

E.g.: IHC : http://www.moneycontrol.com/bse/shar...HC&qtrid=91.00

Tata owns ~38% as promoters share, in addition other Tata entities own 6%.