Mumbai: It was only in September this year that Mistry had said, “A majority of the group’s capital expenditure in the last three years has been in international geographies. With the opening up of two new markets of Iran and Myanmar, several Tata Group firms are gaining traction there.”
Mr Mistry was removed summarily without any explanation. He was appointed, literally handpicked, by Mr Ratan Tata to succeed him as chairman at the end of 2012, though there was also a panel appointed to find a successor.
The Irish-born Mr Mistry, who comes from the construction magnate family of Shapoorji Pallonji Mistry, was only the second non-Tata family member to head the over 100-year-old steel to salt conglomerate. The first was Nowroji Saklatwala. In the absence of any reason for Mr Mistry’s sudden ouster, there is speculation and the reasons range from the losses the group companies have been incurring to the smudge on the Tata Group image over the alleged “stealing” of information from the US Epic Systems. TCS had to pay a fine of $940 million in the US plus $700 million in punitive damages.
TCS, however, said it did not benefit from the information that was stolen by one of its staffers. In another instance, the Tata DoCoMo venture with NTT of Japan took an ugly turn. Tata Sons had to pay $1.17 billion to NTT after an order by the London Court of International Arbitration for breaching a shareholder agreement. The case is still under way. All this did not good to the Tata image, which the Tatas pride themselves on.
There are also the losses that most Tata companies have been incurring, with only Tata Power and Tata Chemicals faring better. The group’s turnover was down to $103 billion in 2015-16, from $108 billion the previous year, and the debt increased to $24.5 billion from $23.4 billion.
Tata Motors survives profitably only due to Jaguar Land Rover’s profitability, while Tata Steel is yet to recover from the costly takeover of Europe-based Corus for $12.5 billion under Mr Ratan Tata.