Mistry betrayed trust, Tata Sons says

The statement said Mistry had no significant contribution to the group companies, except Tata Consultancy Services, as dividends had steadily declined.

"Dividend received from all other 40 companies (many non-dividend paying) has continuously declined from Rs 1,000 crore in 2012-13 to Rs 780 cr in 2015-16," it said.

"While dividend income was declining, expenses (other than interest on debt) onstaff increased from ₹84 crores to ₹180 crores and other expenses increased from₹220 crores n 2012-13 to ₹290 crores in 2015 (excluding exceptional expenses)."

"There was little or no profit on sale of investments during these years, i.e. no significant divestments from Tata Sons’ portfolio, despite a planned list of divestments indicated from time to time," it said.

The company said while  Mistry had shared some plans for growth and management structure when he was selected to be the group's chairman, he did not implement those during his tenure.

"Many companies now have an unacceptable new structure where the Chairman alone is the only common director across several Group companies".

"Mr Mistry betrayed trust, had desire to seek control of main operating firms of Tata Group and excluded other representatives," the statement said.

Tata Sons also alleged that there "were some significant issues of conflict of interest in relation to Shapoorji Pallonji group which Cyrus did not fully address."

The Shapoorji Pallonji group, a construction major, is owned by  Mistry's family.

However, Tata Sons has perhaps made the most serious allegation against Mistry, saying he was "consciously" dismantling the establishment's age-old structure that stood on the vision and philosophy of the founders, thereby reducing the control of promoter company on the group companies, and thus, calling for a remedial action.

"...Even the then existing structure of the group which had stood the test of a long period of nearly 100 years by the visionary founders and generations of Tatas seem to have been consciously dismantled so that now the operating companies are drifting farther away from the promoter company and their major shareholder (except forperiodic presentations) through systematically reducing the effective control and influence of the promoter."

Tata Sons has historically exercised control over its group companies through its shareholding and commonality of senior Directors (apart from the Chairman) which had acted as a binding force in the group for many years and which has enhanced the credibility and creditworthiness of the group companies. We now have an unacceptable new structure where the Chairman alone is the only common Director across several companies and this situation could not be allowed to go on," the statement said.

Mistry was removed as chairman of Tata Sons last month and was replaced by Ratan Tata as interim chairman of the $100 billion steel-to-software conglomerate.

He has this week also been removed as chairman of TCS, and Ratan Tata's close aide Ishaat Hussain will be interim chairman till a replacement is found.