Question : Read the passage given below and then answer the questions given below the passage. Some words may be highlighted for your attention. Read carefully.

Over two weeks after Cyrus Mistry was unceremoniously ousted from the Tata Group as its chairman, the 103-billion group has finally stated its reasons for such a move. In a letter to the media, the 148 year-old Tata Group listed out numerous concerns, including the former chairman's inability to generate adequate profits even as debt mounted, and his "devious" plan to wrest control of the group from Tata Sons, the group's holding company. Four days after his ouster, Mistry had come out all guns blazing at the group, questioning its corporate governance practices while also alluding to constant interference from former chairman Ratan Tata. He also claimed he was a lame duck chairman and that the group would have to write off 18 billion because of five unprofitable businesses. On Nov. 10, the Tata Group finally rebutted Mistry's arguments. The conglomerate's letter came after the group replaced Mistry as chairman of software giant Tata Consultancy Services (TCS), too. Mistry had remained the TCS chairman even after his ouster from the group.The group has pointed out that under Mistry it was facing losses that had affected the dividends paid to Tata Sons.
In its letter, the group said dividends from the group companies declined from Rs 1,000 crore in 2012-13 to Rs 780 crore in 2015-16. Tata Consultancy Services was the only saving grace when it came to generating profits, it said.

"Thus, but for the TCS dividend and even before impairment provisions, Tata Sons would have shown operating losses over the last three years (with a small surplus in between), showing the significant dependence on TCS. This dependence was indeed a source of concern for the Directors and its shareholder," the letter said.
The letter says that Mistry was "consciously" dismantling many of the group companies and reducing Tata Sons' control and influence over them.

"Tata Sons has historically exercised control over its group companies through its shareholding and commonality of senior directors (apart from the chairman) which had acted as a binding force in the group for many years and which has enhanced the credibility and creditworthiness of the group companies," the group said. "We now have an unacceptable new structure where the chairman is the only common director across several companies and this situation could not be allowed to go on."

In his letter, Mistry had raised concerns about his helplessness over handling many of the "legacy hotspots" at the group. These included the group's decision to launch an airline business and the Tata Nano car.

"Nobody will deny that there were some problem companies," the group said. "The three major problem companies are Tata Steel Europe, Tata Teleservices/ Docomo, and the Indian operations of Tata Motors. The fact is that even after four years, there is no noticeable improvement in the operations of these companies, and in fact they have got worse as shown by continuing huge losses, increasing high debt levels and declining share in their respective markets."

"There are a few other companies which are also having different problems-and are these also to be excused as "legacy' issues?" the group questioned.
The Tata Group has been trying to dispose of its steel business in Europe over the past few months without much success. In addition, it also had a public spat with its telecom partner in India, Japan's largest phone company, NTT Docomo. Docomo had been demanding that it be paid half the amount it invested in the 28.5% stake in the partnership.

Question

Why was the new structure where the chairman was the only common director across several companies unacceptable?
Option 1: The Tata group of companies is a very old company and had always operated on the basis that the control over it is through shareholding and commonality of senior directors. In the new structure, the Chairman was becoming the only common director across several companies and this did not sit well as it gave lower credibility and creditworthiness to the Group.
Option 2: The Chairman becoming the common director across several companies made the group an autocracy whereas it was meant to be a democracy. hence the new structure was unacceptable.
Option 3: A common chairman across several companies usually is bad for business as it reduces the stock values and leads to lowering of profits and dividends in the long run. Hence the new structure was unacceptable.

Option 4: The common chairman scenario was not acceptable to Ratan Tata and on his insistence, steps were taken to maintain the commonality of senior directors.

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