Cyrus Mistry has made probably the most damning allegation against Ratan Tata: the 78-year-old industrialist tried to sell IT services company Tata Consultancy Services (TCS) to IBM, but his proposal was shot down by JRD Tata. The allegation is the latest in the "letter war" between Mistry and Ratan Tata ever since Mistry's ouster on October 24.
The proposal to sell TCS to IBM was "near death" experience for India's biggest IT software services exporter and also the country's most-valued company by market capitalisation.
"It is worth recounting a little known fact. Midway during the TCS journey to date, Mr F C Kohli (a founding MD) was suffering from a cardiac condition. Mr Ratan Tata was then heading Tata Industries' joint venture with IBM and approached Mr JRD Tata (former group chairman) with a proposal from IBM to buyout TCS. Mr JRD Tata refused to discuss the deal because Mr Kohli was still recovering in the hospital from his setback," Mistry said in his letter, according to the Hindustan Times.
"On his return, Mr Kohli assured JRD that TCS had a bright future and the group should not sell the company. JRD Tata turned down the offer, demonstrating true vision. But, it was also a near-death experience for TCS at the hands of Mr Ratan Tata," he added.
In another allegation, Mistry said the group paid a high acquisition of $12 billion for Corus due to Ratan Tata's "ego."
"The overpayment for Corus made it harder to invest in it, which had been neglected, and thereby, placed many jobs at risk," Mistry's letter said, according to the Financial Express.
TCS, along with Tata Motors' subsidiary JLR, contribute about 90 percent of Tata Group's profits. The group has 100 companies, of which 29 are listed.
While criticising Ratan Tata, Mistry chose to praise senior TCS and Tata Motors executives including N Chandrasekaran, CEO of TCS, Ravi Kant, former vice-chairman of Tata Motors and Ralf Speth, CEO of JLR.
Meanwhile, in yet another "oust Cyrus Mistry" move, the Tata Group is preparing to remove him as chairman of Tata Power and has sought to convene an emergency general meeting (EGM) for the same.
"Tata Power Company has informed BSE that the company has received a Special Notice and Requisition under Sections 100(2) and 115 of the Companies Act, 2013 (the Act) and the Rules framed thereunder from Tata Sons Limited - the Company's Promoter and shareholder holding 31.05 percent of the paid-up Equity share capital of the Company, for convening an Extraordinary General Meeting of the Members of the Company for considering and passing Resolution for removal of Mr Cyrus P Mistry as Director of the Company under Section 169 of the Companies Act," it said in a regulatory filing to the BSE.
Tata Power will be declaring its Q2 results on November 29, 2016.
The Cyrus Mistry-Ratan Tata row has led to many unsavoury developments at the $125 billion Tata Group, including high-profile exits and defamation suits. Nusli Wadia, whose ouster from many Tata Group companies is almost imminent, has threatened to sue the Tata Group for "false" and "defamatory" allegations made against him.