By Aditi Shah and Promit Mukherjee

By Aditi Shah and Promit Mukherjee

NEW DELHI (Reuters) - Tata Sons' interim chairman Ratan Tata reached out to shareholders of Tata group companies on Wednesday, seeking their support to remove Cyrus Mistry from the board of these companies.

Mistry's continued presence was a "serious disruptive influence", he said.

In a bitter boardroom coup in October Mistry was ousted as chairman of Tata Sons, holding firm of the $100 billion Tata empire, but he is still on the board of some group companies. Patriarch Ratan Tata is back at the helm temporarily, and a public power struggle has since ensued between the two sides.


The letter comes days ahead of key meetings at six group companies, including Tata Motors <TAMO.NS> and Tata Consultancy Services <TCS.NS>, when shareholders are expected to vote on removing Mistry from their board.

In a two-page letter, Ratan Tata said Mistry was removed as chairman because the board of Tata Sons had lost confidence in him and his ability to lead the group, and that his presence in group companies can make them "dysfunctional".

Ratan Tata also said that several attempts at mediation went unheeded and that Mistry had also been offered an opportunity to step down voluntarily, which he rejected and was then removed.

Cyrus Mistry's office, in a statement, said the letter is "a combination of statements ranging from misrepresentation and convenient mischaracterization". It also refuted claims of remediation attempts, saying Mistry was asked to step down only minutes before the board meeting in which he was ousted.

Ratan Tata also said that Tata Sons' capital allocation decisions are based on maximizing long-term shareholder returns, even if some investments have taken time to be profitable, referring to Tata Steel's <TISC.NS> European unit.

"There has always been, and will continue to be, a strong alignment of interests between us and the minority shareholders," Ratan Tata said in the letter, adding that Tata would exit a business only when it was unviable.

Tata Sons, in a statement last month, criticized Mistry for his inability to turn around loss-making units during his four-year term as chairman, instead continuing to blame them as "legacy hot spots" and writing off huge amounts.

In response, Mistry has blamed Ratan Tata for some of the company's biggest debacles and alleged failures in corporate governance at the group.

On Monday, Mistry also sent a notice to shareholders of the companies seeking support against his removal, and stressed the need for governance reforms at Tata Sons, the Tata trusts, its biggest shareholder, and Tata group companies.

Ratan Tata in his letter said the group companies follow the best corporate governance standards and that Tata Sons supports them in a transparent manner through licensed use of the Tata brand, direct and indirect financial support and giving strategic advice on acquisitions, divestments and investments.

"The managements of these companies have enjoyed the operational freedom to develop and execute the right strategy as guided by their respective boards," Tata said.

(Reporting by Aditi Shah and Promit Mukherjee; Editing by Adrian Croft and Susan Fenton)

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