Tata Sons in new attack on ex-chairman Cyrus Mistry

Cyrus Mistry was removed as chairman of Tata Sons last month

Indian industrial giant Tata Sons has deepened the row between it and former chairman Cyrus Mistry.

In a strongly worded statement, Tata said Mr Mistry presided over falling income, rising costs and "dismantled" the company's structure.

His sudden removal last month shocked the business world, and no explanation was given at the time.

Sources close to Mr Mistry said Tata's latest claims used "selective data" and showed "desperation".

Culture change

Tata Sons, is the holding company for Tata Conglomerate, a group of 100 companies whose interests include steel, Jaguar Land Rover and Tetley Tea.

Tata's statement said that in the four years of Mr Mistry's chairmanship, the three main problem companies - which include Tata Steel Europe, owner of Port Talbot - had not improved.

The two others singled out as problem groups are Tata Teleservices/Docomo and the Indian operations of Tata Motors.

Tata's statement said the group's figures as a whole looked good because of the "excellent performance" of two companies, Tata Consultancy Services (TCS) and the UK subsidiary of Tata Motors, Jaguar Land Rover.

It also accused Cyrus Mistry of changing the culture at the 150 year old group,

"Insiders in Bombay House [Tata's Headquarters] who have been with the group for many years silently and helplessly watched the conscious departure from old, proven and successful structures within the group and the induction of very senior executives from outside the group with little or no experience of running large companies and being paid [large] amounts... for purely functional positions at the very top".

Ratan Tata has returned as chairman of Tata Sons

Mr Mistry had led Tata since late December 2012, and was the first chairman in nearly 80 years to come from outside the Tata family.

Shortly after his ousting, he sent a highly-critical letter to the company's board, saying he had become a "lame duck" chairman and alleging constant interference, including being asked to sign off on deals he knew little about.

Mr Mistry's camp said late on Thursday that Tata's statement to justify his removal had used "not much but selective data, unsubstantiated claims and half truths without a word of explanation as to why it became necessary to remove him summarily violating natural justice and without explanation".

Control

Separately, TCS on Thursday removed Cyrus Mistry as chairman. As the former chairman of the conglomerate's holding company, Mr Mistry holds that same role in a number of Tata subsidiaries.

Tata Consultancy Services is the biggest software services firm in India and its income is central to the whole Tata empire.

Tata Sons wrote to TCS nominating Ishaat Hussain as chairman: "In view of this, Mistry has ceased to be the chairman of the board of directors of the company, and Hussain is the new chairman of the company."

Tata Sons holds more than 70% in TCS, but its control is weaker over other companies.

Despite the outpouring of criticism by Tata Sons, some of these businesses may wish to retain his services.

Indian Hotels, which owns the Taj chain, has called an extraordinary general meeting to consider a resolution to remove Mr Mistry as director.

He received unanimous support as chairman from Indian Hotels' independent directors at a board meeting last week, where he was praised for providing strategic direction and leadership.

Mr Mistry is also chairman of Tata Steel, Tata Motors and Tata Chemicals.