Cyrus Mistry, photographed in Mumbai, India on Monday 19th Dcember 2016. Pictures to accompany Simon Mundy's interview.
Cyrus Mistry, photographed in Mumbai on Monday © Dhira jSingh

In the two months since he was suddenly fired as chairman of Tata Sons, Cyrus Mistry has waged an increasingly fierce campaign to expose what he says are governance and legal breaches at India’s largest conglomerate.

On Tuesday, he petitioned India’s Company Law Tribunal to step in to the fight, asking it to replace the entire Tata Sons board and investigate alleged breaches of insider trading law.

In a rare interview with the Financial Times, Mr Mistry argued that he was seeking to secure the group’s future rather than pushing a personal agenda.

“This is about governance — it's not about me, it's not about my position,” he said. “Whatever I have said has been said for the long-term interests of the group. Nothing that I've said is not backed up.” Mr Mistry’s family still controls an 18 per cent stake in the company.

Tata Sons has strongly denied his allegations, accusing him of being motivated by “deep animosity” toward Ratan Tata, his 78-year-old predecessor who has returned as interim chairman.

Their increasingly bitter feud has raised concerns among investors and other Indian business executives that long-term damage is being done to a group that has long been a source of national pride. The combined market capitalisation of the listed Tata companies has fallen by Rs694bn ($10.2bn) since late October.

Mr Mistry’s main goal is to overhaul the Tata Group's unusual governance structure. The Tata Trust charities own 66 per cent of holding company Tata Sons, which in turn holds controlling stakes in the group's operating businesses. 

Mr Tata chairs the trusts and Mr Mistry alleges he has sought inappropriate influence over the strategic decisions of operating companies. He argues that Mr Tata sought confidential information on these decisions before their public announcement, in a potential breach of rules on inside information.

Mr Tata has declined to comment on these claims, which Tata Sons has dismissed as “baseless”.

Mr Mistry said that he would end his campaign “when a structure is put in place at the trusts, which clarifies [their role] with regard to Tata Sons”. He said that this would involve making sure that strategic moves were not made purely on the strength of “one person’s decision”.

Rs694bnFall in the combined market capitalisation of the listed Tata companies since late October

Asked whether he thought Tata could be governed effectively if Mr Tata remained at the helm of the trusts, Mr Mistry paused for several seconds before answering. “I don't know the answer, to be honest with you,” he said. 

“I would not like to say that [good governance] is something totally foreign to him. I just think that there are different entities playing different roles, and one’s stuck in the past, and the past is very different from where we are today. Today it’s a different group . . . a group that has to be institutionalised and not personalised,” he said.

Mr Mistry’s drive to change the trusts’ role has gained some traction in Mumbai’s financial industry. In a note this week, analysts at proxy advisory firm Institutional Investor Advisory Services argued that the trusts’ nominated directors should be stripped of their right to veto Tata Sons board decisions. 

Tata Sons has dismissed Mr Mistry’s arguments on governance, saying that his attempts to limit the powers of the trusts and the Tata Sons board were in fact an attempt to amass power for himself.

Mr Mistry said his resignation on Monday from the five listed Tata operating companies where he remained a director, ahead of shareholder votes to remove him, demonstrated that his campaign was not motivated by a hunger for power.

“People came with a preconceived notion that I was trying to share less information,” he said of his time as chairman. “If anything, what we needed to do was to clearly define what was to be shared where, and where decisions were to be made.” 

Tata Sons has said that Mr Mistry was removed as chairman because of underperformance and a lack of respect for the group’s culture. It also said that he had failed to deal with “conflicts of interest”, though it refused to give any details.

Mr Mistry said he had taken steps to avoid conflicts and cited letters he sent in 2013 to the chief executives of all Tata companies, seen by the FT, instructing them not to give any contracts to Shapoorji Pallonji, his family’s company.

In the interview, Mr Mistry claimed that one of the reasons for his dismissal was a confrontation with Chinnakannan Sivasankaran, a south-Indian businessman who has boasted of his “close association” with Mr Tata. 

At Mr Mistry’s last board meeting before his sacking, Mr Mistry said he had successfully argued that legal action should be taken against Mr Sivasankaran's Siva Group in relation to a 2008 three-way agreement among Tata, Siva and Japan's NTT DoCoMo.

Mr Mistry argued that this move had fatally undermined his position with Mr Tata.

Tata Sons said that suggestions of a link between the legal proceedings and Mr Mistry’s sacking were “deliberate falsehoods”. Lawyers for Mr Sivasankaran and a spokesman for Mr Tata declined to comment.

Mr Mistry conceded that his campaign was contributing to “pain” for shareholders and other stakeholders. But he argued that “the behaviour of Tata Sons is what creates the loss of value. My idea is to make sure that we reform to make sure these actions don't happen again”.

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