Corporate turmoil in Tata

Sons and its long term impact

on Indian Industry
2328926 - ManiRaj V
2328928 - ManuPrasad S N
2328929 - Meianandhan B
2328932 - Nikitha S
2328934 - Nithin Raj D
2328941 - S Lalitha Mahathi
History of Tata Sons dispute and its current status

The Tata Group was founded in 1868

by Jamsetji Nusserwanji Tata. Tata The dispute has since
was a visionary industrialist who escalated, with both
believed in the power of business to The dispute began in sides making a
2016, when Cyrus number of
improve the lives of Indians. He
Mistry, who was then allegations against
established a number of successful the chairman of Tata each other. The Tata
businesses, including the Tata Steel Sons, was removed Group has accused
Company, the Tata Iron and Steel from his position. Mistry of
Company, and Power Company. Mistry challenged his mismanagement and
removal in court, incompetence, while
arguing that it was Mistry has accused
Tata Sons corporate dispute is a illegal and that he had the Tata family of
complex and long-running legal been unfairly ousted corporate
battle between the Tata Group, India's by the Tata family. governance abuses
largest conglomerate, and the and nepotism.
Shapoorji Pallonji (SP) Group, one of
its largest minority shareholders.
 Tata Sons from its inception and its unique position

The Tata Group was The Tata Group was The Tata Group was The Tata Sons
one of the first one of the first one of the first corporate dispute has
Indian companies to Indian companies to Indian companies to highlighted the
establish a research adopt a policy of establish a corporate importance of good
and development affirmative action for social responsibility corporate governance,
department. marginalized groups. foundation. and the Tata Group
remains committed to
its values and ethical
culture.
Mr. Ratan Tata and Mr. Cyrus Mistry Dispute

1). Conflict of interest

Cyrus ji was in a proposal of raising funds for Orissa elections, the state in
which Tata Group possessed Iron ores.
2). Poor governance
He was instrumental in awarding contracts of Tata Power and TCS valued at
2000 crores to the SP Corporation(belonging to Cyrus family)
3). Tendency to concentrate control
US based Pizza Company Caesars to establish a food chain in India.
To acquire Welspun Energy assets at a whopping
Impact of Philanthropic Trust

Social Responsibility
and Impact Risk Management

Long-Term Vision Resilience and Adaptability

Mitigating Short-
Termism Community Development

Stakeholder
Alignment Sustainable Practices

Legacy and
Values Legal and Ethical Governance
Effect of dispute on strategy and growth

Shareholders,Employees,Custom
ers and Suppliers,Creditors and
Impact on
Lenders
Stakeholders

Legal Litigation Costs, Regulatory

Scrutiny
Consequences
Strategy and
Growth
Reputation and Reputation Damage, Strategic
Strategy Planning, Diversification and
Growth

Resolution
Impact Resolution Terms, Long-Term
Stability, Restoration of Trust
Mechanisms for settling corporate disputes in India

Arbitration and
Company Law Board
Mediation ● Amicable Negotiation
(CLB)
● Ombudsman Schemes
● Winding-Up Petitions
● ADR Institutions
● Supreme Court and
High Court
● SEBI Takeover
Regulations
Shareholders' ● SEBI's Insider Trading
SEBI and Stock
Agreement Regulations
Exchanges
Avoid repetition of these types of corporate disputes

Clear
Governance
Independent Structure
Directors

Conflict Resolution
Mechanisms.
Shareholder Agreements
Succession Planning
Ethical Guidelines
Risk Management
Regular Legal Compliance
Communication Stakeholder Engagement
Independent Auditors
Ethical aspects arising out of the business dispute
Social Implication of the Business Dispute
Evaluation of the business sustainability issues

The corporate turmoil in Tata Sons raises a number of business sustainability issues, including:
Weak corporate governance: The Tata Group's board of directors failed to adequately supervise
Cyrus Mistry's management, leading to allegations of corporate
governance lapses. This has damaged the Tata Group's reputation and eroded public trust.
Succession Planning: The Tata Group did not have a clear succession plan in place when Cyrus
Mistry was ousted as chairman in 2016. This led to uncertainty and
instability within the group.
Risk management: The Tata Group did not adequately manage the risks associated with Cyrus
Mistry's removal. This led to a number of negative consequences, including
the loss of top talent and disruption to operations.
Corporate Governance issues involved in the case

● Corporate Governance is the system by which companies are directed and controlled.
It encompasses the entire mechanics of the functioning of a company and attempts to
put in place a system of checks and balances between the Shareholders, Directors,
Employees, Auditor and the Management
● Dominant powers are given to the promoters
● Affirmative voting rights
● Independence in decision making
Possible solutions to the situations

Company should have had clear agreement on rights, responsibilities and liabilities

Company should have done prior due diligence before appointing

Company should have avoided litigation through arbitration

Company could have offered a compensation package to settle the matter

Thank you!