'I will never do anything to hurt you or your family': Ratan Tata in letter to Pallonji Mistry in 1991
Nevin John February 20, 2020
At a time when Ratan Tata and his successor-turned-foe Cyrus Mistry are fighting it out in the Supreme Court, a letter which Tata wrote to Cyrus's father, Pallonji Mistry on March 27, 1991, explains how important the Mistrys were for Tata in his fight against the satraps who headed key companies in the 90s. On the third day in his office as Chairman, Tata wrote to Pallonji, addressing him as "Pallon" and appreciated his support and encouragement in the early years of his career, when JRD Tata was at the helm.
After the ouster of Cyrus Mistry as Tata Group Chairman in October 2016, the two Parsi business families have been engaged in a fierce legal battle over the unceremonious removal and privatising of the holding company, Tata Sons, in which the Mistry family holds 18.37 per cent stake. The Tatas won in the National Company Law Tribunal (NCLT), but the order was reversed by the appellate tribunal, which asked the group to reinstate Cyrus as Chairman.
The Supreme Court (SC) last month stayed the order of the National Company Law Appellate Tribunal (NCLAT) and slotted the case for hearings. Meanwhile, Cyrus Mistry and his investment firms (Cyrus Investments Pvt. Ltd and Sterling Investments Pvt. Ltd) have filed a fresh petition in the Supreme Court pleading for being granted directorship in Tata Sons, which was converted into a private company from public after the disputes began.
According to legal sources, Tata's letter to Pallonji Mistry is part of the affidavit filed by Mistry in the Supreme Court. In the letter, Tata said that he values the contribution of Mistry. Tata wrote: "... hope I can continue to enjoy your confidence as we work together in the coming years."
When JRD Tata chose Ratan Tata as his successor in 1991, the young Tata was little known in the group companies and considered weak in front of stalwarts like Russi Mody, Darbari Seth and Ajit Kelkar. Since the satraps were strong operational heads at Tata Steel, Tata Chemicals and Indian Hotels Company, respectively, there was a fear that Ratan Tata would be sidelined by them. But Tata fought it out with the help of another Parsi industrialist, Nusli Wadia. However, the relation of Wadia and Tata has soured ever since Cyrus Mistry was removed. Wadia, who was on the boards of major Tata group companies, was ousted by Tata for supporting Cyrus. The groups have not responded to the query from BusinessToday.in.
Pallonji Mistry, who was known as the Phantom of Bombay House for his quiet and measured interference in the Tata empire, had never publicly disputed Ratan Tata until he vacated the directorship on the board of Tata Sons for his younger son, Cyrus. Tata wrote in the 1991 letter to Pallonji, "Within the next fortnight I will fix a time to exchange views with you on the long-term opportunities and direction of Tata Sons -- and the actions necessary to achieve these goals. Our common agreement and mutual faith will foster a true and lasting relationship without any misunderstanding -- and in the best interest of Tata Sons as a company. Our standing together will also be a matter of strength."
Tata concluded the letter saying, "In ending, let me reiterate that I will never do anything consciously to hurt you or your family." With circumstances taking a u-turn, the concluding line of line of Tata has no relevance today. Sources in Tata group say that there would be many such letters exchanged between the stakeholders, which may not have eternal value.