MUMBAI • Mr Ratan Tata has set up a team to collect data from the units of India's largest conglomerate to help Tata Sons rebut allegations made by ousted chairman Cyrus Mistry and respond to queries from regulators, according to people with knowledge of the matter.
Mr Tata, interim chairman of Tata Sons, is leading the team, the people said, asking not to be identified as they are not authorised to speak to the media. A Tata spokesman confirmed the details.
India's market regulator is examining a letter written by Mr Mistry alleging lapses in corporate governance, people familiar with the matter said on Thursday.
Mr Mistry, in the letter dated Oct 25, accused directors at Tata Sons, the group's holding company, of wrongfully dismissing him and warned that the salt-to-software giant may face 1.18 trillion rupees (S$24.6 billion) in writedowns due to five unprofitable businesses.
Tata on Thursday said Mr Mistry was fired because of a growing "trust deficit" with the biggest shareholders of the group.
The Tata Group is a 148-year-old business house with over 100 operating firms in India and abroad.
It has interests in consumer goods, aviation, wristwatches, cars, steel, software outsourcing, telecommunications and hotels.
The fallout has dominated headlines in India, where companies rarely air their dirty linen in public.
"In going public in his self-defence, Mistry has altered the group's equation with the ecosystem within which it operates," Institutional Investor Advisory Services India, a proxy adviser, said in a statement yesterday. "The group should no longer expect to be revered and now must prepare to come under far greater scrutiny of its financials and workings."
Mr Mistry said he inherited a debt-laden enterprise saddled with losses and singled out Indian Hotels, Tata Motors' passenger-vehicle operations, Tata Steel's European business, as well as part of the group's power unit and its telecommunications subsidiary as "legacy hot spots", according to the e-mail.
The team put together by Mr Tata will gather information from companies including Tata Teleservices, Tata Motors, Tata Power and AirAsia India, a venture between Tata Sons and low-cost airline AirAsia, sources said.
Meanwhile, Tata has launched a four-month search for a new chairman. But whoever lands the job will inevitably face the same challenges that Mr Mistry felt he was unable to tackle because, he alleged, he lacked the backing of a board that he said answered only to Mr Tata.
Mr Shriram Subramanian of InGovern, a shareholder advocacy group, said: "What was 10 to 15 years ago - a Tata group that was a paternalistic conglomerate with more than 100 companies just ambling along - no longer works."