Brand value took a hit under Mistry, says Tata Sons

Tata Sons Pvt. Ltd stated on Thursday that regardless of claims of excellent efficiency, the chairmanship of Cyrus Mistry noticed an erosion in model worth and a decline within the monetary efficiency of Tata group corporations. The holding mother or father of Tata group corporations stated in a courtroom submitting that the majority of working corporations underperformed the benchmark Sensex index, and that Tata Sons didn’t enter any important enterprise alternatives throughout Mistry’s tenure.

“Cyrus Mistry, as executive chairman, was more often than not ‘finger pointing’ and ‘blaming’ the past and failed to recognize that in the case of Tata Operating Companies with varied businesses, it would not be unusual to expect headwinds in some of the businesses,” Tata Sons stated in a Supreme Court submitting reviewed by Mint.

On the opposite, the method of the present management below the chairmanship of N. Chandrasekaran has been one in every of reworking the companies, it stated.

Recognizing that there’s important floor to cowl, Tata Sons has invested ₹28,500 crore within the working corporations to appropriate their steadiness sheets and help progress, the Tata corporations’ mother or father stated.

Mistry, via his two funding companies that maintain a stake in Tata Sons, is combating a courtroom battle over his ouster in October 2016 and is in search of proportional board illustration as the most important shareholder within the holding firm of the group. The authorized battle has now been on for 3 and a half years.

Mistry was sacked citing efficiency points by the board of Tata Sons, prompting Mistry funding companies to file a petition alleging mismanagement and oppression of minority shareholders. In December final yr, the National Company Law Appellate Tribunal (NCLAT) dominated in favour of Mistry companies, which led to Tata Sons interesting within the Supreme Court.

Quoting Brand Finance, Tata Sons stated the worth of the “Tata” model really declined from roughly $14.eight billion in 2014 to $13.1 billion in 2017 (most of which coincided with Mistry’s tenure).

In industrial automobiles, Tata Motors steadily misplaced market share from 60% just a few years earlier to hit a low of 44% in FY17. Similarly, the home private automobile enterprise additionally ceded market share from roughly 12.4% just a few years in the past to five% in 2017, stated Tata Sons.

Separately, Tata Trusts, that are additionally a celebration to the case, stated in a rejoinder filed on Thursday that the trusts don’t “wield power”; they empower and rework individuals’s lives.

A spokesperson for the Mistry group didn’t provide any feedback; nevertheless, an official on situation of anonymity stated, “During Mistry’s tenure, there was a strong focus on improving operational performance. The focus was on rationalizing of commercially non-viable circles//chk// and improving quality of revenue.” Referring to the present management, this official added, “In the last three years, Tata Sons invested about Rs67,000 crore in portfolio companies. The value of these investments has already eroded by approximately Rs40,000 crore.”