Former Tata GEC member Nirmalya Kumar reveals how Cyrus Mistry was fired as Group Chairman
Former Group Executive Council member at Tata Sons Nirmalya Kumar today posted a blog in which he revealed the sequence of the events that led to Cyrus Mistry's removal as Tata Chairman. Cyrus Mistry had hired Nirmalya Kumar to head strategy for the Tata Group, a position that had required Kumar to intensively interact with the former chairman. In his blog titled: How Cyrus Mistry was Fired as Tata Chairman, Kumar wrote that ahead of Mistry's exit, Ratan Tata and Tata Sons board member Nitin Nohria met the former and asked him to put down his papers.
"Nitin Nohria begins by proclaiming that Cyrus as you know the relationship between you and Ratan Tata has not been working. Therefore, Tata Trusts have decided to move a board resolution removing Cyrus as Chairman of Tata Sons." Cyrus Mistry was, Kumar wrote, offered the option of resigning or facing the resolution for his removal at the upcoming board meeting. To which Mistry responded and said: "You are free to take it up at the board meeting and I will do what I have to do." Later in a board meeting, Cyrus Mistry was removed as Tata Chairman. "It was all over in minutes, no explanations and no opportunity for Cyrus Mistry to prepare a rebuttal," Kumar wrote.
The former GEC member also explained how Tata managed the Cyrus Mistry's unceremonious exit. Immediately after his removal, Mistry called his childhood friend and top notch lawyer, Apurva Diwanji, to help him. They (Apurva and Cyrus Mistry) knew that they needed a public relations agency and a lawyer immediately. "What they did not know was that Tata had already engaged six major public relations companies and booked many of the most prominent lawyers in the country in a bid to squeeze the resources available to Cyrus post firing," Kumar wrote.
Kumar further suggested that no Tata senior official had ever said anything negative against Mistry. "Despite the best efforts of the press promoted by the six PR agencies and pressure from the internal Tata communications team, only two Tata CEOs, Bhaskar Bhat and Harish Bhat, have had anything negative to say about Cyrus Mistry in the press. And, even they, were remarkably muted in their criticism," the former GEC member wrote, adding that the initial contract under which Cyrus was serving as the Chairman had been passed via a shareholder resolution of Tata Sons.
"It was due to expire on 31 March 2017. Instead of the sudden, no warning dismissal, the board could have just let the clock run out in five months. By eschewing the public humiliation of Cyrus Mistry, the bloody aftermath that followed could have been avoided," Kumar stated in the blog. He also said that in Tata-Mistry fight it was the PR firms who came out as winners. He said: "The only winners as far as one could see were the public relations companies and lawyers, who are still having a field day.