After several exits, Tata Sons now seeks to oust Cyrus Mistry from board
MUMBAI | AHMEDABAD: Tata Sons has served a notice to remove former chairman Cyrus Mistry from its board as the battle between the two camps threatens to sever the Mistry family’s direct involvement in the board decisions of the Tata Group’s holding company.
Two top people in the know told ET that a notice was sent to Mistry on Tuesday. The decision to remove him was in the works, but a meeting on Tuesday morning of senior members of the Tata Group finally decided to bite the bullet and start the process of expelling Mistry from the position he has held since 2006.
A formal meeting of shareholders to ratify the move will be held in early February after the National Company Law Tribunal hears the petition filed by Mistry-family owned entities against Tata Sons on January 31.
Mistry, the scion of the Pallonji Mistry family, is Tata Sons’ largest individual shareholder along with brother Shapoor Mistry. They together own 18.4 percent of Tata Sons equity.
This development may not come as a surprise to many following the recent events at Tata Group. The Mistry camp has hurled accusations at Ratan Tata and the Tata Group over many alleged misdemeanours, which are likely to have hurt the 149-year-old group’s image. In an interview to ET on December 19, the day he stepped down from the operating companies of Tata Group, Mistry had said he had no plans to leave the Tata Sons board.”No I won’t. Not unless they plan to throw me out,” he had said.
In an email response, Tata Sons said: “No such decision (to remove Mistry from the board) has been taken by the Tata Sons board.”
In recent days, the Tata Group and Cyrus Mistry’s office have been exchanging legal notices. On December 28, Tata Sons had accused Mistry of violating the law by making public certain confidential corporate information with a view to damaging the conglomerate, demanding that Mistry “cease and desist” from making further revelations.
“Such reckless failure on your part in discharging your fiduciary, legal and contractual duties has caused irreparable harm and damage to Tata Sons and the Tata Group and our client intends to exercise all legal rights and pursue all remedies,” said a notice issued by law firm Shardul Amarchand Mangaldas on behalf of Tata Sons.
It said the information was given to the Mistry family-owned Cyrus Investments and Sterling Investment Corporation, which included it in their petition against Tata Sons before NCLT.
“We believe we are fully compliant with all legal requirements. An appropriate response has been sent. Only those afraid of the facts would seek to suppress facts,” a source close to Cyrus Mistry had said in response.
The shareholders meeting will be held within a week of the hearing, a source said, but did not confirm the date. Unless the court intervenes, Mistry’s ouster from the Tata Sons board will be a foregone conclusion, as Tata Trusts control over 67 per cent in the holding company.
Source: ET
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