India Inc is no stranger to high-decibel corporate boardroom battles, but this year everyone on the ring side was taken by surprise when Ratan Tata and Cyrus Mistry listed up for a top-draw fight, unannounced.
The suddenness of the development was far from the build-up to the fight between Muhammad Ali and George Foreman on October 30, 1974. However, what happened on October 24, 2016, at Bombay House when Mistry was sacked as Chairman of Tata Sons and the subsequent public slugfest definitely matched the intensity of ‘The Rumble in the Jungle’, blow for blow.
The Tata versus Mistry saga mirrored the bout in Zaire between Ali and Foreman—a former unbeaten heavyweight champion taking on an undefeated young reigning title holder to assert authority.
At 79, Tata, who had retired as Chairman of Tata Sons in December 2012, has been there and done that—having seen off group satraps such as Russi Mody of Tata Steel, Darbari Seth at Tata Chemicals, Ajit Kerkar at Indian Hotels, and A H Tobaccowala at Voltas when he was much younger in the 1990s.
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On the other hand, his successor Mistry, at 48, was dubbed to be preparing for a long innings at the helm of the India’s largest conglomerate till the sucker punch arrived.
As much as it was personal and an ego tussle, the duel between the two, however, was not merely about who was the best to lead the USD 103 billion salt-to-software conglomerate.
To outsiders, the words of the protagonists made it look like a clash between the old guard and the new; of carrying on with tradition versus the need to keep pace with time and of long-term growth against fixing pressing immediate problems.
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“Cyrus Mistry was replaced as the Chairman of Tata Sons after four years in that role on October 24, 2016, because the board of Tata Sons lost confidence in him and his ability to lead the Tata Group in future,” Tata explained to shareholders of group firms.
He also stated that board felt that Mistry’s removal was “absolutely necessary” for the future success of the group.
With the two sides trading charges and allegations on a daily basis in what was turning out to be India’s biggest boardroom feud, Tata lamented that “there has been a definite move to damage my personal reputation and the reputation of this great group - the Tata Group”.
On the other hand, Mistry, who termed his sacking as an “illegal coup”, was not going to be pushed over easily, alleging that his ouster was aimed to cut short his “attempt to bring about reform” at the Tata group.
Indicating how much the fight was becoming a personal battle, Mistry said: “I have treated Ratan Tata with the respect and dignity that he can command. Indeed, a retired chairman can always feel that his “legacy” is under threat.
“But a retired chairman can also move on without feeling insecure about his legacy and have the emotional stature to know that what was once a right decision at one point in time may not be a right decision at another point in time.”
Mistry’s argument mostly revolved around corporate governance and transparency, to the extent of alleging Rs 22 crore fraudulent transactions involving non-existent entities in India and Singapore in Tatas’ joint venture with Air Asia. He also repeatedly questioned the role of Tata Trusts in the running of Tata Sons, the promoter company of major operating firms of the conglomerate.