Tata may find dismissing Mistry easier than his accusations | Reuters

NEW DELHI Ratan Tata may have dumped Cyrus Mistry as chairman of his 148-year-old family empire, but will find it harder to expunge the ex-manager’s accusations that his acquisitive habits and lack of focus on returns have destroyed billions of dollars in shareholder value.Tata Sons has rejected as baseless and malicious the allegations that Mistry, 48, laid out in a 5-page letter to the board accusing Ratan Tata of backseat driving while in retirement and of thwarting his drive to restructure and refocus the $104 billion Indian conglomerate.

Tata has launched a four-month search for a new chairman, and whoever lands the job will inevitably face the same challenges that Mistry felt he was unable to tackle because, he alleged, he lacked the backing of a board that he said answered only to Ratan Tata.”What was 10-15 years ago – a Tata group that was a paternalistic conglomerate with more than 100 companies just ambling along – no longer works,” said Shriram Subramanian of InGovern, a shareholder advocacy group. “Shareholders need reassurance that the Tata operating companies are really working to enhance shareholder value rather than acting on the whim of one individual.”The incoming chair also faces possible regulatory probes after Mistry alleged a total breakdown in corporate governance, and said a “realistic assessment” of the group’s portfolio would require $18 billion in writedowns.

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