'Cyrus Mistry's resignation must be read as a new beginning'
Ousted Tata Sons Chairman Cyrus Mistry's resignation from the boards of remaining six listed Tata companies must be read as a new beginning to clean up some of the issues plaguing the governance structures across the group, proxy advisory firm IiAS said on Tuesday.
In a dramatic turn of events, Mistry -- who was sacked as Tata Sons Chairman on October 24 -- on Monday quit from the boards of six listed Tata Group companies.
"Cyrus Mistry's resignation must not be seen as an end in itself -- instead it must be read as a new beginning to clean up some of the issues that plague the governance structures across the group, address the operational aspects (or hotspots), and establish a succession plan that is enduring," IiAS said in a report.
Following the resignation, the report said Tata Group needs to address the issues that this conflict has raised.
"In doing so, it must also find an appropriate strategy to calm the discord- going to the courts will be detrimental for both sides," it added.
Noting that the public disclosures made by both sides -- as explanations, rebuttals, and representations -have been disconcerting for investors, IiAS said the disclosures have raised some legitimate questions on how the Tata Group functions within its internal structures.
Among others, the report said that Tata Group must ensure that there would be a "balanced power structure at Tata Sons' board".
The report also has a disclaimer saying that Tata Group, through Tata Investment Corporation, holds equity in IiAS.