One mans ego put many Tata jobs at risk, says Cyrus Mistry

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MUMBAI: Cyrus Mistry, the ousted chairman+ of Tata Sons, has hit out at Ratan Tata again, saying his impulsive ways put thousands of jobs at risk when he bought global steel major Corus at a highly inflated price and settled for a telecom technology going against expert advice for Tata Telecom.

In a hard-hitting missive titled 'Ratan Tata takes credit, Cyrus Mistry shares credit' issued on Tuesday, Mistry said it was common knowledge that the decision to acquire Corus for over $12 billion, when only a year earlier it was available at less than half that price, "was based on one man's ego and against the reservations of some board members and senior executives".

"Similarly, in November 2003, Mr Tata, against the advice of many of his own team members, decided to back CDMA as the platform for the group's telecom business," Mistry wrote.

The statement also presented data about high-value client wins for Tata Consultancy Services (TCS) comparing Mistry's tenure with Ratan Tata's chairmanship. Mistry, who was sacked as Tata Sons chief, said he was issuing the statement to deny Tata Sons' allegations that he was a hands-off chairman and that he did not make any 'material contribution' to the success of the Indian IT major. The statement, sent through Mistry's office, was in response to Tata Sons statement of November 10 which had said the success of TCS and Jaguar Land Rover (JLR) were a manifestation of Ratan Tata's vision and efforts.

Mistry said from fiscal 2011 to 2013, the number of clients that contributed $100 million or more to TCS' annual revenues doubled from eight to 16. This was the period when Ratan Tata was chairman. After Mistry took over in December 2012 from Tata, the corresponding number more than doubled to 37 by the end of fiscal 2016. A similar trend of strong growth was witnessed relating to clients who contributed more than $50 million to TCS' annual revenues, data presented by Mistry showed. During his tenure, he said he had met at least 60 global CEOs, "some along with TCS leadership, to reinforce the capabilities of TCS for organisations to co-innovate in the digital world".

Mistry also said that as TCS chairman, he had helped improve the IT major's finances, enabling it to declare a special dividend of Rs 40 a share in fiscal 2015. Mistry said the special dividend was declared "without compromising (TCS') firepower for acquisitions". Cash and cash-equivalents too doubled during the same period to Rs 20,500 crore.

Mistry said that as the non-executive chairman of TCS, his main focus was to future-proof its strategy and help fortify its relationships at the highest levels of corporate hierarchy "by leveraging the strength of the Tata Group". Mistry praised the leadership of N Chandrasekaran, the current MD of TCS, and the thousands of employees, and said that the best for TCS was yet to come. 

In a bid to "set the record straight", Mistry also pointed to the growth trajectory of JLR under his command. Mistry said the auto major has been able to achieve scale as well as minimise currency and supply chain risks by investing in new facilities. "Its lack of scale required it to invest disproportionately compared to the industry in new technologies that will help meet the regulatory requirements and differentiate its products. This has been done without leveraging the balance sheet and retaining adequate liquidity," said Mistry.

Mistry said that he had also been closely associated with JLR, its strategy meetings and design reviews. Between 2012 and 2016, in addition to board and budget meetings for JLR, Mistry said he had spent over "120 days including 38 days on JLR design review, 56 days on offsite strategy meetings as well as market visits to dealers in China, USA and India".

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