Independent directors of IHCL back Mistry
Independent directors of the Tata group firm, the Indian Hotels Company Limited (IHCL), not only reposed ‘full confidence’ in chairman Cyrus Mistry but also ‘praised’ the steps taken by him in providing strategic direction and leadership to the company at a board meeting to approve its second quarter results on Friday. This signalled that the group holding company Tata Sons has a long and messy fight on its hands if it wants to displace its ousted chairman from the helm of individual group firms. Tata Sons’ interim chairman Ratan Tata wants Mr. Mistry to quit the chairmanship of all group firms, but the latter would be emboldened with the independent directors backing him in the second of several board meetings scheduled for firms he still chairs over the next few weeks. Mr. Mistry had dispelled speculation last week that he would resign from the chairmanships of all group companies by attending the board meeting of Tata Global Beverages.
IHCL confirmed that its independent directors, including HDFC chairman Deepak Parekh, Godrej Industries managing director Nadir Godrej, former Hindustan Unilever boss Keki Bomi Dadiseth, Ireena Vittal, Vibha Paul Rishi and Gautam Banerjee, met at 2 p.m. at Bombay House, ahead of the meeting of the full board. “We are doing what we think is right. Ultimately all the shareholders will have to decide,” Mr. Godrej told The Hindu when asked about their endorsement of Mr. Mistry’s leadership.
“After deliberations, the independent directors came round to the view that being a listed company, it was imperative for the independent directors to state their views to the investors and public at large, so that those who trade in securities of the company, make an informed decision,” Indian Hotels said, on the outcome of the meeting.
The independent directors’ backing for the chairman signalled that they agreed with his claim that the IHCL not only had a flawed international strategy, but also acquired the Searock property at a highly inflated price and housed it in an off-balance sheet structure, said a Mumbai-based analyst.
Incidentally, ahead of the board meeting, a scuffle broke out between mediapersons trying to photograph Mr. Mistry and the Tata group security personnel outside Bombay House. Two lensmen and one security man were injured.
Source: The Hindu
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