Ousted Tata Sons chairman Cyrus Mistry on Tuesday alleged that Ratan Tata once tried to sell the TCS to IBM and his “ego” led to business decisions like the acquisition of Corus.
“It is important to set the record straight since insinuations and leaks are being made explicitly to create an illusion that Mistry was a ‘hands off’ chairman and TCS/JLR were on ‘auto-pilot’ during his leadership,” Mr. Mistry’s office said in a five-page letter on Tuesday.
Listing out the details of his efforts as a non-executive chairman at both the companies, the letter said the salt-to-software conglomerate is “busy apportioning credit” for the stellar performances.
The letter said Mr. Ratan Tata, who took over as the interim chairman following Mr. Mistry’s controversial dismissal from the group on October 24, had once tried to sell the group’s crown jewel TCS to global giant IBM.
Without giving the timelines, the letter claimed the then chief F.C. Kohli’s illness had prevented JRD Tata from going ahead with Ratan Tata’s proposal.
“Ratan Tata was then heading Tata Industries’ joint venture with IBM and had approached JRD Tata with a proposal from IBM to buyout TCS. JRD refused to discuss the deal because Kohli was still recovering in the hospital,” it said.
It claimed that Mr. Kohli flatly refused the proposal, saying “TCS has a bright future and the group should not sell the company.”
“JRD turned down the offer, demonstrating true vision. But it was also a near-death experience for TCS at the hands of Ratan Tata,” the letter claimed.
The letter, which is third in a series of clarifications issued by Mr. Mistry’s office, also blamed Ratan Tata’s “ego” for bad business decisions, including the buyout of British steelmaker Corus at a high cost and also sticking to the CDMA technology for its telecom business imperiling thousands of jobs.
A section of the letter headlined ‘One man’s ego versus an institution’ claimed that Mr. Ratan Tata’s ego resulted in the Corus deal worth USD 12 billion — twice the cost of what it was available for one year prior to the transaction — despite opposition from some board members and senior executives.
Source: The Hindu