Tatas limp back to normalcy

It added that the group must now expect far greater scrutiny about its finances and workings and �should no longer expect to be revered�.

Tatas limp back to normalcy

After days of intense media war following the dismissal of Chairman Cyrus Mistry, the 150-year-old Tata business empire composed itself on Friday to signal to investors and employees that the past is past and it is back to its old elan.

However, proxy advisor Institutional Investor Advisory Services (IiAS) said in a note, “The Tata group must recognize its engagement rules have now changed. The... developments (have) left stakeholders bewildered. The board has failed to recognize (its) need to communicate. This absence of clear communication has prompted excessive speculation.”

It added that the group must now expect far greater scrutiny about its finances and workings and “should no longer expect to be revered”.

Friday's announcements from two Tata Group companies seemed intended to change the narrative away from the recent boardroom battles. Tata Steel went public with its agreements with Quebec government entities in Canada to conclude investments of nearly Rs 875 crore.

Tata Steel said in a statement that one of its Canadian units has decided to invest C$125 million as equity and C$50 million as debt with the Government of Quebec’s investment entities, Resources Quebec and Investment Quebec (IQ) respectively.

This is to set up mining operations across Quebec-Newfoundland and Labrador peninsula and multiple processing facilities, including a beneficiation plant.

Further, Tata Motors announced it had secured the third position in the JD Power 2016 India Customer Service Index Study.

May it be recalled that Mistry has picked up the steel and auto businesses for his harsh comments in a letter to the Tata Sons Board, pointing to the “flawed” decisions that, he claimed, could lead to Rs 1.18 lakh crore write-downs within the Group.

Media reports indicated that more “positive” announcements will be forthcoming next week.

Sources said that “during the meeting between Ratan Tata and the group CEOs, it was agreed that the best way forward is to not let individual companies get affected by the controversy. Tata also conveyed that boardroom issues at Tata Sons should not cascade down to the business.”

On Tuesday, a day after taking over as the Interim Chairman of Tata Sons, Ratan Tata had met CEOs of Group companies and told them to work towards taking the companies to leadership positions in their respective businesses.

“The companies must focus on their market position vis-à-vis the competition, and not compare themselves to their own past,” he said, addressing managing directors and senior leaders of Tata companies, according to a press release from Tata Sons.

Since the controversy became public on Monday, uncertainty over the future leadership has unnerved investors and employees. Tata Group companies lost a combined Rs 27,506.34 crore in market value over three days. On Friday, Tata stocks bounced back to close the day with up to 6 percent gains. Shares of Tata Motors rose 2.68 percent and Tata Steel 1.85 percent on the BSE.

However, questions remain on the manner in which Mistry was eased out. Analysts say Mistry’s allegations merit a response.