Yes that's what it is ultimately, minority shareholders turning out to be the biggest losers as it happens in any boardroom or corporate battle.
When Mistry voluntarily resigned from the leftover listed companies in his hands, it seemed that it was all over. Well, yes and no. "Yes" because the battle now ends in the boardroom. No more EGMs, no more drama and no more 'masala' for the media. And "No" because simply the battleground now shifts to the courtroom. Again this is how it shapes up in any battle when money..err...big money is at stake. So media will continue to get 'masala' albeit of a different kind.
To me its Mistry's conduct or his strategy has been confusing. Upon he being chucked out of Tata Sons which is the holding company of all Tata group companies it was simply a matter of formality that he would have been shown the door in all group companies with ease, as Tata Trusts are the biggest stakeholders in the holding company.
As per latest news reports Mistry now demands the dismantling of the Tata Sons board. I simply fail to understand why and how it benefits the group companies and their business which is what every corporate must strive for ultimately.
As per latest news reports Mistry now demands the dismantling of the Tata Sons board. I simply fail to understand why and how it benefits the group companies and their business which is what every corporate must strive for ultimately.
Which brings me to the question as to why Mistry was asked to leave in the first place. The real reasons and what actually transpired and lead to Mistry's exit would never be known as there would be allegations from both sides time and again leaving the lay man and also minority shareholders completely clueless.
To me at least Mistry was the right person leading the group considering the way he lead the group during his short but eventful stint. While Ratan Tata increased the size of the group based on revenue, the group's profitability declined substantially under his leadership and so did shareholder wealth. Mistry on the other hand was a task master and did not fear to take bold decisions and thats what the Tata Group needs today. Ratan Tata talked about preserving " Tata Group Values" which is really meaningless.
A corporate survives on profits and yes though values are of utmost importance, shrewd business decisions are equally important. So for instance when Mistry talked about scrapping the Nano project. That was a bold and right move, simply because Nano as Ratan Tata has himself acknowledged has been a failure. Nano was an emotional decision and not at all a good business preposition though we have the benefit of hindsight which Ratan Tata did not have, he had enough time during his tenure to call it a day for the Nano.Then why did he not scrap the project himself and now when Mistry wanted to do so why the objection?
A corporate survives on profits and yes though values are of utmost importance, shrewd business decisions are equally important. So for instance when Mistry talked about scrapping the Nano project. That was a bold and right move, simply because Nano as Ratan Tata has himself acknowledged has been a failure. Nano was an emotional decision and not at all a good business preposition though we have the benefit of hindsight which Ratan Tata did not have, he had enough time during his tenure to call it a day for the Nano.Then why did he not scrap the project himself and now when Mistry wanted to do so why the objection?
Where the courtroom drama ends is only to be seen but one thing is for sure ultimately the minority shareholders would lose value, Tata and Mistry would reach some kind of compromise once their egos give way and in all this melee some top corporate lawyers would become even richer!!
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