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Old 5th November 2016, 17:37   #166
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Default Re: Ratan Tata makes a comeback as Chairman of Tata; Cyrus Mistry out

Today's Economic Times carries an article about certain financial transactions with respect to Air Asia which cannot be traced to any bona fide company or party. Amount reported is around 22 CR.

It seems Mistry's letter spoke about facts while Tata has merely been talking about ambiguous things such as ethos, legacy and values.

Apart from the IHCL independent directors, minority shareholders are also upset over the way Mistry has been treated. Without going into the merits of the allegations levelled by the Tata Sons, if the group chairman is removed in such a humiliating manner, there must be a very very solid reason for it.

It is now more a matter for Tata to prove his integrity and honesty of intention in removing Mistry, at least in my mind. Looks as if there are a lot of skeletons waiting to tumble out of closets.
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Old 5th November 2016, 18:00   #167
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Default Re: Ratan Tata makes a comeback as Chairman of Tata; Cyrus Mistry out

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Originally Posted by NetfreakBombay View Post
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%.
Yes, but this isn't as easily done as appointing a director in the normal course of business. Changing a status quo, even with so much holding, can be a lot more difficult than maintaining one.

Removing a director needs special notice 14 days ahead of a meeting, a meeting of shareholders where the director in question can be heard in his own defence and may involve a proxy war where the financial institutions can spring a surprise - because the resolution has to be passed with more than 50% of the votes. And the stated and bald reason that worked for Tata Sons - that the Trusts don't trust Mistry anymore, isn't valid where it comes to Tata Motors, for example.

A very messy affair, in which a lot of skeletons are likely to be given extended and a very public airing, where Mistry and proxies may not be pushovers. And almost impossible to do if the independent directors behave the way they seem to have in Indian Hotels.
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Old 5th November 2016, 18:15   #168
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Default Re: Ratan Tata makes a comeback as Chairman of Tata; Cyrus Mistry out

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And almost impossible to do if the independent directors behave the way they seem to have in Indian Hotels.
Certainly, if Tata does not have 50%+ holdings it can't overthrow the board (other financial institutions would not likely be part of boardroom politics).

But if Tata does have that, it needs to follow the process but need not assign any reason for removal of board.
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Old 5th November 2016, 18:33   #169
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Default Re: Ratan Tata makes a comeback as Chairman of Tata; Cyrus Mistry out

That is based on the case law, I agree; but what happens if the director, in the meeting, presents a compelling case as to why he ought to not be removed? It cannot be just be a silent and therefore arbitrary action. It also depends on what other independent directors do and things can get sticky if they rebel. Do you seriously think that Tata will then propose removing all existing independent directors and get away with it?

No one holds enough shares in any Tata company for it to be their private property - except perhaps TCS.
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Old 5th November 2016, 20:19   #170
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Default Re: Ratan Tata makes a comeback as Chairman of Tata; Cyrus Mistry out

Pretty good arguments there, I must say. However even if Tata Sons management finds a way to legally remove Cyrus Mistry, I think the Tata reputation had already been damaged. They haven't been able to make any of their allegations stick, and each day Mistry seems to have been vindicated.

I don't know about others and I don't know which way this dispute will end, but I no longer have respect for the name of Tata.
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Old 6th November 2016, 00:07   #171
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Default Re: Ratan Tata makes a comeback as Chairman of Tata; Cyrus Mistry out

Mr. Mistry imo was creating a 'polity' of his-own, gradually: i.e., taking over Tata group bit-by-bit in terms of personnel and business practice or vision (or rather its lack, beyond cost cutting and asset sales).

THAT imo is what Mr. Tata/TataSons means when they say he was in violation of its ethos. Mr. Tata/TataSons does not like and does not want such a takeover of the group: a dilution-over-time of all the Tata Sons' way+style+philosophyi.e., ethos of trust-with-autonomy/openness to professional outsiders from all communities/religions/countries etc as opposed to mr. Mistry's evidently more desi-industrialist style of micro-managment based on a coterie of power-delegates. Mr. Mistry's tenure has been bereft of all non-defensive or non-reactive, non-share-price-centric etc decisions. Tata Motors rationalisation is not in the least entrepreneurial or visionary, just a cleaning-shop and routine re-organization/re-working

Hardly like the expansive old entrepeurial group Tata was, is and should remain. Not that a priori one style/ethos/'culture' is always 'better' than the other, but the fact is there are certain strengths and ethical-virtues found in the former while being completely bereft in the latter, as the overall Indian corporate scene makes amply clear and obvious.

Mr. Mistry, one fears and this is only a fear/hypothesis (let us see!), has also allied or will soon for this battle now-underway with certain party-political powerful/trying-to-dominate forces whose interference in Tata affairs and in the Tata's autonomy (cultural and political) and their 'values'-projection will increase greatly, as a result.

This will become clear, either way, once the voting patterns of the 'independent' directors and esp the 'institutional large private-sector AND esp public-sector investors' becomes clear in the upcoming board meetings+potentially precipitated shareholder general meetings and votings.

Tata Sons and Tata Trusts are reviled in certain, not all, 'desi' business and political quarters precisely out of an ideological resentment for their greatly seen-to-be non/anti-'desi' cosmopolitan/arrogant/aristocratic and professional-first-yet-with entrepreneurship/risktaking approach, within India and under Mr. Ratan tata: globally.

Afterall, the Radia Tapes were leaked by someone for someone's benefit on the bidding of someone! While sundry other 'tapes' never get aired/get all too easily suppressed, including one currently that is an absolute atom-bomb way 'worse' than anything on the Radia tapes.

Also: us concerned outsiders/shareholders/employees etc should be wary of such 'news' 'channels' as moneycontrol.com or economictimes.com (owned by...?!): they'd be all-too implicated, financially AND party-politically, in the PR and other proxy-wars being fought in the name of corporate governance versus betrayal of promoter family-trust-ethos etcetera.
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Old 6th November 2016, 01:15   #172
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Default Re: Ratan Tata makes a comeback as Chairman of Tata; Cyrus Mistry out

When words like legacy and ethos are bandied around you know that the word EGO is not far behind.

The main fault with Mr Mistry is that he did not invest enough in his personal PR unlike his predecessor. If he had built up a public persona, it would been much harder to unseat him.
Anyway, only time will tell how much the individual shareholder / public has been rogered by this exercise.
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Old 6th November 2016, 09:14   #173
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Default Re: Ratan Tata makes a comeback as Chairman of Tata; Cyrus Mistry out

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Originally Posted by honeybee View Post
I no longer have respect for the name of Tata.
As I see it, opinions will be divided between the above, and those that still have
respect.

I doubt that there will be anyone that now has more respect for Tata, or there will be people that now have respect for the Tata name because of this.

Bottom line therefore when aggregated, a loss of respect for the man and the brand, with no need to guess how many have lost respect for these. I would not be surprised at all if it was a large number though.
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Old 6th November 2016, 09:58   #174
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Default Re: Ratan Tata makes a comeback as Chairman of Tata; Cyrus Mistry out

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Originally Posted by rdhawan15 View Post
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.
Exactly, it makes Ratan Tata's retirement seem unnecessary, if he wanted it his way 100% of the time all he should've done is continue on. In any change of leadership, there has to be changes across the business in a few ways otherwise the very point of such replacement is moot. If the intention was to have a puppet regime, then the intention should've been expressed well before such change and only a person agreeing to it should've been put in place.

Its a mess now, a total mess. I'm sure the company as a whole is wealthy beyond imagination.. they absorbed the losses associated with the Nano development + Singur issues + poor sales like it was nothing, likewise they bought JLR and pumped massive sums into it again like it didn't matter. Still, there comes a time when someone has to talk of becoming lean-er, a bit more cleaner and giving back to the shareholders a little more than usual, that's exactly what Cyrus Mistry tried. World domination is great and all, but its a huge task and no matter how many industries they try to get into, they cannot succeed in that.

Gone are the days when TATA dominated the private+public sectors of India, its no longer as crucial as before thanks to American and other international companies making their presence felt. Its time that the company operated in a less bureaucratic way and focussed on great quality, great customer satisfaction and happier shareholders, even if its narrowed down to steel, hotels and um.. salt?
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Old 6th November 2016, 11:40   #175
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Default Re: Ratan Tata makes a comeback as Chairman of Tata; Cyrus Mistry out

You talk of Tata companies being cash rich so much that they have absorbed losses and have gone on an acquisition spree, but where has all that money come from?

I am sure a large percentage of it is shareholder's money and they deserve to be told why the group started not one but two aviation ventures, or why the Nano project was not killed already.

Or for that matter what Mr. Cyrus actually did wrong. So far there has been nothing forthcoming from the Tata camp. On the contrary, the manner in which this whole drama is unfolding I am sure the investors must have lost whatever value they had by the falling share prices.

Last edited by honeybee : 6th November 2016 at 11:41.
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Old 6th November 2016, 12:03   #176
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Default Re: Ratan Tata makes a comeback as Chairman of Tata; Cyrus Mistry out

A blog by someone who's obviously a talented professional & got fired for being on Cyrus' team.

I just got fired!

So poorly handled. Am finding it hard to believe this is the Tata Group we're talking about.

Quote:
Back in my apartment trying to get information from the company with little success. At 9:00 pm, I get a call from a colleague with whom I had worked very closely and got along famously as we were often on the same side of arguments. He informs me: “it is my unpleasant duty to say your services are no longer required”. No explanation. I query does this mean I do not need to show up tomorrow morning? Receive an affirmative reply. That’s it. It’s all over in a minute. Now readers, no pity is needed. It is something that has happened to many, and there are entire reality shows on TV built around the theme “You are fired!” But, still nothing prepares you for this. I realize that I am unemployed for the first time since the age of 18.
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Old 6th November 2016, 12:41   #177
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Default Re: Ratan Tata makes a comeback as Chairman of Tata; Cyrus Mistry out

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Originally Posted by GTO View Post
A blog by someone who's obviously a talented professional & got fired for being on Cyrus' team.
I'd realised only yesterday that Nirmalya Kumar was on the board of TATAs, having read his book on marketing here's a brief background on the man :

- Professor at Harvard Business School (visiting)
- Alumnus of University of Illinois (MBA) and Kellogg (Ph.D)
- Ranked as one of the best professors in business studies/marketing globally
- Has a deep focus on customer and end-consumer satisfaction
- Faculty at London Business School (I think this is where he and Cyrus must've become associated as Cyrus is an alumnus of LBS)

I remember this loosely but his theories always involved value, value customer, value proposition and value output and the likes. We can never determine the real reason for any of the current happenings, but one thing is for sure - the way the company is handling the reshuffle is nothing short of stupendously disrespectful.

One can clearly see that the man only felt dejection for the team that he was building and training and called his associate to replace him maybe hours after his removal. Not being greedy is a rare, unappreciated quality in the nasty world of man eat man business.. sometimes it just gets worse.

Last edited by dark.knight : 6th November 2016 at 12:42.
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Old 6th November 2016, 12:43   #178
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Default Re: Ratan Tata makes a comeback as Chairman of Tata; Cyrus Mistry out

imo Mr. Mistry has been compromised-by and has compromised-with or displayed a lack of political-management-ability (both in the uk and especially in india) in dealing+coping-with 'party political powers that (may) be' in ways that has been seen by a large number of TataSons 'folk' as a betrayal or at best grave 'weakness' in the medium to longrun.

A number, though not all, not at all, of his 'deals' (sales and purchases, opportunities too-readily foregone for lack of pr and 'political' gumption esp in the defence sector) reek of such er compromises/abject surrenders, no doubt/perhaps in good short-term share-price etc faith but....?

"Thin end of the political wedge....." etc! Mr. Tata and Tata Sons have 'been there, done that' for well over a century, they probably know that such approaches, such modus operandi and modus vivendi-with-the-powers-that-be are, at best, dicey and very dangerous over time, that is: in the current and foreseeable political-economic/policy/etc context. Or so they've judged, no doubt based on what someone uncharitably and reductively called 'ego'?!

Mr. Tata is the original sinner in this regard, as he is now himself implicitly admitting: in choosing Mr.Mistry (based on 'family'/'caste' and on 'incentive alignment') over....whom?

i.e., a non-family 'professional'-yet-with-public/PR/political-knowhow-and-knowwhat/when/why AND yet 'Tata Trusts-worthy'. Like in the Rusi Mody etc satrapy days?

Such a creature probably does not exist in family-business and crony-politically-vulnerable or thriving-capitalist India, anymore! That is the mildly tragic condition Mr. Tata/Tata trusts/Tata Sons find themselves in. Where will they find such a unicorn, now?! Remembering that the Tata promoter family-line is near-over (post-Ratan-Tata.)
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Old 6th November 2016, 18:38   #179
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Default Re: Ratan Tata makes a comeback as Chairman of Tata; Cyrus Mistry out

Isnt it time the Mods moved this thread out of "Indian Car Scene"? I dont see any thing automotive in this thread. There is no news or even mention on any change in direction or strategy in Tata Motors due to this development. There are just allegations and counter allegations, so called comments from "insider" "anonymous" sources. Does not make much value either.
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Old 7th November 2016, 11:16   #180
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Default Re: Ratan Tata makes a comeback as Chairman of Tata; Cyrus Mistry out

Worrying times ahead, if your FIIs are concerned about confidential strategic information getting "leaked out" to preferential (or should I say influential) people in the Tata Sons board.

Quote:
The note to all directors elaborated on the responsibilities of a publicly traded company’s board, said the people cited above. Directors are duty bound to keep information of strategic relevance within the confines of the board, it said, adding that all shareholders should be privy to the same level of information at any given point in time.

The letter makes no reference to any action being contemplated by the investors.
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