Ousted chairman of Tata Sons, Cyrus Mistry’s letter sent to the Board of Directors of Tata Sons on 26 October, two days after he was unceremoniously sacked by the board and which is available in the public domain, has come as a rude shock to corporate India and created an impact something similar to that of a letter submitted by Ramalinga Raju, former chairman of Satyam Computer Services Ltd, to Satyam’s Board of Directors seven years ago (January 7, 2009) -if not by way of content per se, but by the shrapnel effect it has triggered off.
Mistry chose to dish out a long, no-holds-barred offensive letter with serious allegations on the modus operandi of and financial ‘haemorrhage’ waiting to implode within the group. Though the public is aware that certain business units of the Tata group are not performing well and of the legal tussle with DoCoMo, certainly the accusations that over a period of time, nearly Rs 1 lakh crore may have to be written down sends jitters down the spine of India Inc.
The letter has definitely dented the reputation of Tata group, which is considered a role model for business ethics in the country. Whether it is a note shot off indiscriminately by a desperate person with an intention to avenge his shock exit or a carefully-worded letter whose contents merit careful consideration will be known only as the days pass.
In contrast, Ramalinga Raju’s letter to Satyam’s Board was defensive in tone, a self-confession of a massive fraud in the accounting system of the company and reporting of its financials. As the letter unfolded, it sprayed splinters all around, leaving India dazed.
Mistry opens his deluge with ‘I was shocked beyond words at the happenings at the board meeting of October 24, 2016…..’, and goes on to paint the performance of the Tata group as one of a sinking ship and hints that massive efforts were required to salvage the vessel.
Raju’s letter started with the lines, ”It is with deep regret, and tremendous burden that I am carrying on my conscience, that I would like to bring the following facts to your notice…..” and pulled out many skeletons from his cupboard – of reporting inflated (non-existent) cash and bank balance, understated liability, overstated debtor position, so on and so forth. He tendered his resignation through the letter.
Tata Sons has appointed a five-member search team to find a successor to Mistry, while in the case of Satyam, the Government of India stepped in immediately and appointed a six-member board of highly distinguished persons–in two phases – to salvage the mess and to find out a successor to Raju who could own the company. Thanks to the extraordinary work of this task force, within 100 days of the formation of the team, Tech Mahindra, smoothly and in a transparent manner, took over Satyam Computers and the rest is history.
Satyam’s was a case of a massive scam falling in the criminal domain and its ripples had to be contained as quickly as possible, not just to keep the employees and shareholders of Satyam relieved, but to sustain India’s vantage position of a leading software services provider in the global markets. Hence the need for the Government of India to step in.
Tata group’s controversy arising of Mistry’s letter may as well taper off after the initial tremors and fireworks, but in the best interests of the nation that owe in no small measure to the mind-boggling contribution of the Tatas, it will be only appropriate that corrective measures are quickly put in place by the Board and random charges, even if they are allegations– are seriously examined and redressed and public faith in the group is restored.
All that India wants is that Tata group – its flagship business conglomerate –is in the pink of health and that it continues to enthrall Indians with mesmerising stories of commitment, passion, and performance – be it in the writing of a software programME, churning out a piece of steel or saving the lives of guests staying in their hotels, come what may.