Shares of Tata Group firms such as Tata Motors, Tata Steel and Indian Hotels plunged up to 12 per cent after Cyrus Mistry's scathing 5-page letter to the board of directors on Wednesday.
Reacting to the news, Tata Group pack extended losses for the third straight day.
Tata Motors dipped 3.55 per cent, Tata Steel fell 4.47 per cent while Indian Hotels took a plunge of 12.68 per cent on the BSE.
Shares of Tata Global Beverages, Tata Power and Tata Elexsi fell 4.06 per cent, 5.70 per cent and 2.41 per cent respectively.
In the letter, Mistry warned that the salt-to-software giant may face Rs 1.18 lakh crore in writedowns because of five unprofitable businesses he inherited.
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Defending his record, Mistry said he inherited a debt-laden enterprise saddled with losses and went on to single out Indian Hotels Co, passenger-vehicle operations of Tata Motors, European operations of Tata Steel and part of the group's power unit and its telecommunications subsidiary as "legacy hotspots."
Meanwhile, market regulator SEBI have begun looking into the Tata-Mistry case for any possible breach of corporate governance norms and listing regulations.
"We (Sebi) are taking note of each and every development and will act immediately on any hint of possible violation of corporate governance and listing norms or any other regulation under our jurisdiction," a senior official said.