Thursday, October 27, 2016

Cracks in the Bombay House

Cyrus Mistry's letter / email to Tata Sons board subsequent to his ouster from chairmanship contains serious allegations on the lack of propriety on the part of Ratan Tata. He has alleged that Ratan Tata continued to boss over him and never allowed him to be independent. C.Sivasankaran, a friend of Ratan Tata, was granted unmerited loan by Tata Capital which turned sour. R.Venkataramanan, a protege of Ratan Tata, brought pressure on Cyrus Mistry not to reveal a corporate fraud in Air Asia. Mistry was not provided any clue at any time that his performance was poor.

It is incumbent on SEBI and stock exchanges to probe the matter fully in order to protect interests of shareholders of the group companies. Even if Mistry and Tata patch up, SEBI and others cannot abdicate their fiduciary responsibility to investing public. Obviously, all is not well in the state of Denmark.

It is becoming clear that Ratan Tata is touchy about his legacy and cannot tolerate anyone undoing it even by way of clearing the mess. His teflon image is losing its magic and his feet of clay are becoming visible.

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