Join­ing Hands, House of Tatas Closes Door on Cyrus Mistry Noel Tata & mother Si­mone back Ratan Tata; Minocher Tata’s chil­dren ab­stain; Cyrus Mistry & brother Shapoor skip meet­ing; bat­tle shifts to NCLT

The Economic Times - - Front Page - Our Bureau

Mum­bai: Tata Sons re­moved for­mer chair­man Cyrus Mistry from its board on Mon­day, bring­ing to a close an­other chap­ter in the bat­tle for con­trol at In­dia’s old­est and largest con­glom­er­ate that erupted with his dra­matic ouster as chair­man on Oc­to­ber 24 last year. “The share­hold­ers of Tata Sons, at the ex­tra­or­di­nary gen­eral meet­ing (EGM) held to­day, passed, with the req­ui­site ma­jor­ity, a res­o­lu­tion to re­move Cyrus Mistry as a di­rec­tor of Tata Sons,” the com­pany said in a press re­lease. The 80% vote in favour of the de­ci­sion put the seal on the found­ing Tata fam­ily’s con­trol of the group hold­ing com­pany after Mistry had re­belled against his ouster. The re­sult was never in doubt, de­spite the Mistry fam­ily’s 18.4% stake in Tata Sons as that’s trumped by the two-thirds hold­ing of the Tata Trusts run by Ratan Tata. At the EGM on Mon­day, the Tata fam­ily put up a united front, said peo­ple aware of the mat­ter. Tata ma­tri­arch Si­mone (wife of the late Naval Tata) and her son Noel Tata is­sued prox­ies in favour of Ratan Tata. There had been some spec­u­la­tion about his vote as Noel Tata is mar­ried to Cyrus Mistry’s sis­ter.

“It was a fore­gone con­clu­sion,” a source close to Mistry said. Vera Farhad Chok­sey and her brother Jimmy Tata ab­stained. They are the chil­dren of Minocher Tata, a de­scen­dent from the Sak­lat­vala fam­ily line. Tata Sons de­clined to com­ment on vot­ing pat­tern of in­di­vid­ual share­hold­ers.

Cyrus Mistry and his brother Shapoor de­cided to skip the meet­ing. In­stead, they sent a team of three peo­ple led by Roshan Lentin as their rep­re­sen­ta­tives for the meet­ing held at Bom­bay House, the Tata head­quar­ters. ET had first re­ported about the plan to hold an EGM to re­move Mistry from the board on Jan­uary 4.

Mistry had been un­able to per­suade the Na­tional Com­pany Law Tri­bunal (NCLT) in Mum­bai and its ap­pel­late tri­bunal in Delhi to stay the EGM.

Apart from the Tata Trusts — a group of eight char­ity or­gan­i­sa­tions — and the Mistry fam­ily, the rest of the Tata Sons shares are held by Tata Group com­pa­nies, Ratan Tata, Noel Tata, Si­mone Tata, Jimmy Naval Tata, Vera Chok­sey and her brother.

After Mistry was sacked, a search panel ap­pointed by Tata Sons se­lected N Chan­drasekaran, chief ex­ec­u­tive of the Group’s most prof­itable com­pany, Tata Con­sul­tancy Ser­vices, to take over. He will do so on Fe­bru­ary 21, re­plac­ing in­terim chair­man Ratan Tata.

The bat­tle will now shift to NCLT with hear­ings sched­uled for Fe­bru­ary 13 and 14. Cyrus In­vest­ments Pvt Ltd and Ster­ling In­vest­ment Cor­po­ra­tion Pvt Ltd, both Mistry fam­ily firms, have al­leged op­pres­sion of mi­nor­ity share­holder rights and mis­man­age­ment at the Tata Group.

“Mistry ap­pears to have ex­hausted all his reme­dies and fur­ther ap­peal to the Supreme Court does not ap­pear to be prac­ti­cally vi­able. He just has to now wait for NCLT to give its de­ci­sion on the main pe­ti­tion,” said Ran­jit Prakash, chief ex­ec­u­tive part­ner at Arche- us Law. “He can, of course, file an ad­di­tional af­fi­davit chal­leng­ing Mon­day’s EGM on new grounds (of his re­moval to­day), but it is highly un­likely that NCLT will en­ter­tain or af­ford any sep­a­rate hear­ing.”

The 344-page pe­ti­tion filed in De­cem­ber by the Mistry fam­ily firms was served on 23 peo­ple that in­clude in­dus­tri­al­ists Ajay Pi­ra­mal and Venu Srini­vasan, Har­vard Busi­ness School dean Nitin Nohria, coun­try head of pri­vate eq­uity fund Bain Cap­i­tal Amit Chan­dra, re­tired bu­reau­crat Vi­jay Singh and for­mer Tata vet­eran NA Soon­awala. They in­clude trustees and Tata Sons board mem­bers.

After his re­moval, Mistry had blamed Ratan Tata for poor busi­ness de­ci­sions and lax cor­po­rate gov­er­nance stan­dards. He al­leged that the Tata Trusts un­duly in­ter­fered with the daily busi­ness de­ci­sions of the group, mak­ing him a “lame duck” chair­man.

Tata Sons has de­nied any such in­ter­fer­ence on the part of Tata in the past four years after he took over as chair­man of Tata Trusts. Tata Sons said Mistry did not stick to his promise of be­com­ing an In­dian cit­i­zen and park­ing his stake in Tata Sons in a “blind trust” as part of in­su­lat­ing the own­er­ship from man­age­ment. It said Mistry also failed to present a strate­gic vi­sion for the group.

A day be­fore launch­ing his le­gal bat­tle in De­cem­ber, Mistry stepped down from the chair­man­ship and di­rec­tor­ship of listed Tata com­pa­nies after fail­ing to win over enough votes from in­sti­tu­tional and re­tail share­hold­ers. He vowed to keep fight­ing to im­prove gov­er­nance within the $103-bil­lion soft­ware-to-salt con­glom­er­ate.

ARINDAM

Newspapers in English

Newspapers from India

© PressReader. All rights reserved.