Chapter 11H: Cyrus Mistry exit was the ultimate success of the Citi legal ecosystem. By 2018, the strategy was clear – take over the main promoterless companies. HDFC was in the bag. L&T and Tatas were advanced work in progress. There were several side shows – mutual fund players, insurance players, real estate players.
To counter Sahara, alternate players were being pumped up. By 2016, Sahara had ceased to be a threat – both in the money collection business as well as in the money export business.
But suddenly there was new and big time trouble for Citibank. It was a rather unexpected and soft spoken entrant – Cyrus Mistry. He wanted to go clean. He wanted to help Dilip Pendse. And he was wondering where all the Tamilian Mahasabha members had emerged from.
One fine day he realised that everyone seemed related to everyone. Except for him. And the proverbial shit hit the fan. The chain started from S Venkatachalam at Citibank (also SBI) and then went to th seniormost Tamilian in the land – an eminent lawyer who served as Finance minister. And then went on to R Venkataraman who controlled Tata Trust as its CEO and was related to Venkatachalam. And then there was a Tata executive turned govt advisor called Ramadorai. And he had a son in law called Chandrasekhar who had a brother who was being groomed to be CEO. It didnt end there. He had three directors on Tata Sons who seemed eminent and truly independent. And then he suddenly realised that Amit Chandra was the brother in law of Nitin Nohria (ex Dean of Harvard Business School). And that another poor cousin was set to take over L&T. And yet another was being groomed to take over HDFC.
Cyrus Mistry was unable to deal with the wheels within wheels. He sought papers disclosing conflicts and related parties. There were none. Independent Directors are not required to disclose their non-blood relationship with other independent directors. They are only required to disclose if they are independent. Chandrasekhar is the son in law of Ramadorai. But nowhere in section 2 of the companies act say that a person is a related party of his son in law.
There were a huge set of tax issues in Tata Trust. I have been personally and directly aware of these. Same with Tata Finance. Cyrus was told that there was too much at stake in opening that can of worms. Cyrus wanted to come clean. He didn’t want any related party transactions and he didn’t want any relatives.
I spent two hours once discussing these. Oh my God !!! It had gone from frying pan to fire – from 2003 to 2016. I have always believe that there is only one way to catch a bull – and that is by the horns. And whether it is HDFC or L&T or Tatas. Or for that matter Citibank – I have done so. And to that extent I do walk the talk. I have not had any fiduciary relationship with any of them for decades. Of course I have been a member of many boards – including with S Venkatachalam. But I had no inkling that this was sedition at play.
More later.
