People privy to the developments at the group told CNBC-TV18 that Shapoorji Pallonji, which has an 18 percent stake in Tata Sons, approved the changes to Articles of Association (AoA). The decision to change AoA was taken after extensive discussions between Ratan Tata and Mistry, they said. It is said that Justice BN Srikrishna advised them on AoA amendments.
In the letter, Mistry wrote: “After my appointment, the Articles of Association (AoA) were modified, changing the rules of engagement between the Trusts, the Board of Tata Sons, the Chairman and the operating companies. Inappropriate interpretation followed. It severely constrained the ability of the group to engineer the necessary turnaround.”
Further, the sources said that the AoA was modified to put in place a proper governing structure for group and as Tata Sons and Trusts had different chairmen after a long time. Also, they said that Mistry was a board member since 2006 and was well aware of the challenges the group was facing before he was appointed Chairman in 2012.
They also rebutted Mistry’s charges that financials of the company improved since the time he took charge as Chairman. They said Mistry was taking credit where its not due.
Barring Tata Consultancy Services ( TCS ) and Jaguar Land Rover (JLR), Tata Sons has made an operating loss and the stellar performance of the IT company and the automotive firm was due to their respective CEOs, sources said.
Tata Sons on Tuesday appointed TCS CEO N Chandrasekaran and JLR CEO Ralf Speth as Additional Directors on its board to reward their performance.
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