Image: Guru Prasath R

 

Cyrus Mistry's ouster is something of a dark moment for Indian business journalism. After all, it came as much as a bombshell to the public as it did to Cyrus himself. Apparently, no one knew - or was willing to share - news of the event before it happened. 

 

Perhaps as repentance, over the past week, the Tata Group of companies now has more leaks than the Titanic. The one thing that became apparent amid the deluge of "sources say" tales being spun out every day is that the battle for the Tata empire is not only far from over, but shall now descend into an ugly public brawl. 

 

Perhaps Ratan Tata and Tata Sons were hoping for a smoother battle, betting on the historical prestige and deference given by the group companies to Tata Sons - the holding company. But those hopes were dashed as soon as it became evident that Mistry would not resign from his positions across various Tata company boards. 

 

And it is an impressive roster. Mistry is on the board of Tata Consultancy Services (Tata's biggest money spinner), Tata Industries Limited (the hi-tech business section), Tata Power Company Limited, Tata Teleservices Limited (the Tata Docomo part), Tata Steel Limited, Tata Motors Limited (From Nano to Jaguar) and Tata Chemicals Limited (the one that makes salt and produces soda ash). 

 

The battle lines, as such, have been drawn across old vs. new ties. From Tata Sons, not only has Mistry been ousted but three of his 'loyalists' were unceremoniously dumped from a governing council as well. 

 

On the other hand, in the case of Indian Hotels, which owns and operates the Taj hotel brand among others, Mistry received strong support from the board. The CEO - Rakesh Sarna - was appointed by Mistry. Also, the business made a profit after a long time under Mistry, increasing his appeal in its ranks. 

 

For now, the worry within the ranks of the Tata Trusts has to be the upcoming meetings of the boards of Tata Steel and Tata Motors - behemoths of the Tata Group. Mistry has enacted several painful rationalisation exercises in those companies, which proved highly unpopular among the Tatas but made business sense. 

 

This 'business sense' is what the Tata Trusts and Ratan Tata will have to overcome. Even if their appeal is cloaked in history and 'good sense', one cannot escape the feeling that it is still an appeal for the status quo - a situation that the independent directors of various Tata Group companies may not be all that eager for. 

 

And they certainly have a voice. Take Tata Motors for example. The 11-member Tata Motors board consists of chairman Mistry and six independent directors — Nusli Wadia, Subodh Bhargava, Nasser Munjee, Phalguni Nayar, Vinesh K Jairath and Raghunath Mashelkar. That's seven out of 11 in a company that has been forced to bear more than ₹1000 crore in losses because Ratan Tata wanted the Nano. How loyal will they remain to him? 

 

On the other hand, the Tatas control anywhere from 20 to 30% of most companies, so they can always line up support for their cause. But no matter what they do, Cyrus Mistry is not going simply fade into the night in shame. He controls a large share of the Tata Empire as chairman of various boards. His family controls a large portion of the entire Tata Group. 

 

Ratan Tata and Mistry are going to have a long-drawn out fight. And even as the valuation of the Tata Group continues to roller coaster, for the rest of us, there is little to do except grab some popcorn and watch what might become India's biggest business battle. 

 

There will certainly be plenty of "sources".