What Tata And Mistry’s Ex-Colleagues Make Of The Supreme Court Verdict

Most former Tata Group leaders like R Gopalakrishnan have watched the battle between Ratan Tata, the group’s holding company and Cyrus Mistry from the sidelines. Others, like Nirmalya Kumar and Nawshir Mirza, were still actively working with the group in different capacities as executives or board members when Cyrus Mistry was ousted as chairman in 2016 and legal hostilities broke out.

After the Supreme Court ruled in favour of the Tata entities, BloombergQuint spoke to them on the implications of the verdict and how they view its culmination.

R Gopalakrishnan – Former Executive Director, Tata Sons. He joined Tata Sons in 1998 and retired in 2015.

Currently – Executive in Residence, SPJIMR.

The episode has been most unfortunate for the group. After all the sensational statements and reportage, it is a great relief that it has concluded. Employees and group leaders can now concentrate on their tasks and agenda without distractions. That is surely a great positive.

Nirmalya Kumar – Former Head of Strategy and Member of the Group Executive Council of Tata Sons. He joined in 2013 and was forced to resign alongwith Cyrus Mistry in 2016.

Currently - Lee Kong Chain Professor of Marketing at Singapore Management University and Distinguished Fellow at INSEAD Emerging Markets Institute.

I always knew that the court cases could go either way; fortunately, we won some and lost others. The bigger point is that everyone in the leadership of the Tata Group knows exactly what happened and that Cyrus Mistry was treated both unfairly and inconsistent with Tata values. Understandably, they cannot voice their candid opinions given their dependence on the group for their livelihood. Once they leave, they have more degrees of freedom as you can observe in Mukund Rajan’s book. But like the Niira Radia tapes, the failed global acquisitions, this leadership fracas will be part of Ratan Tata’s legacy when analysed objectively in the future.

Nawshir Mirza – Former Independent Director, Tata Power. His term ended in 2019.

Currently – Vice President, Association of Corporate Independent Directors

This outcome is along expected lines, and not one that should surprise anyone. No court will give a judgment that will seriously upset an existing settled situation, and any judgment to the contrary would have resulted in upsetting a settled situation. So you could assume that the court will stand for the status quo as it doesn’t seem to actually have any public policy issue.

Coming to the question of the role the [Tata] trusts play in the companies. I have always maintained, and I repeat again… apart from the legalities of affirmative rights and so on, I think the real issue is that the trusts’ beneficiaries are the peoples of India. Because that’s what the trusts have been formed for. They are not a family trust of Mr. Tata’s ancestors, giving him the shares for his advantage. These ancestors, and they are not even his blood ancestors, set up the trusts for the benefit of the peoples of India. So all the income of the trust has to be applied for public philanthropic activities – and that’s what they do, all the various trusts.

Now, it is incumbent upon the trustees, therefore, whoever they are, Mr. Tata or anyone else, to demonstrate that the actions they are taking are in the interests of the people of India. And if they cannot demonstrate that, their actions according to me are mala fide. It is their obligation to demonstrate the benefit to the people of India from whatever major decisions that they take. And this they have patently failed to do. They have taken decisions… decided to whatever they did, right or wrong… but they have not told us how it is going to benefit the peoples of our nation. This is where the failure has occurred according to me. I don’t even think this issue was agitated in the courts by anybody, but that’s not for me now to comment upon. Now unless I read the judgment, I can’t say anything more.