This is the second instance of Cyrus Mistry being replaced in a Tata group company
Image: Vivek Prakash / Reuters
In a fresh twist to the raging battle at the House of Tata, the board of directors of Tata Global Beverages Ltd (TGBL), which met on November 15, replaced Cyrus Mistry as the chairman of TGBL with 7 of 10 members present voting in favour of the resolution.
TGBL informed the stock exchanges of this change after the board meeting.
Reacting swiftly to the move, Mistry’s office said in a statement that “the developments at the board meeting of the Tata Global Beverages Ltd is nothing but a repeat of the illegality that the Board of Directors of Tata Sons Ltd did on October 24. There was nothing on the agenda about replacement of the Chairman just as there was nothing in the Tata Sons board agenda on October 24.”
“The Tatas continue to demonstrate the lack of respect for due process of law that they have displayed. Harish Bhat, an employee of Tata Sons proposed that Mr SK Santhanakrishnan be made chairman at the meeting. This proposal was ruled out since there was already a chairman for the meeting, namely, Cyrus Mistry. When the proposal to remove Mr Mistry was sought to be moved, it was ruled out by the Chairman since it was not on the agenda. The meeting was conducted by Mr Mistry as chairman and was concluded. The statement made to stock exchanges today is therefore inaccurate and illegal and it is but a repeat of exactly the same illegal acts done by Tata Sons Ltd on October 24,” the statement from Mistry’s office added.
Two independent directors Darius Pandole and Analjit Singh opposed the bid at committing these illegal acts, it further said.
This is the second instance of Mistry being replaced in a Tata group company, the first being when Tata Sons called for his replacement at Tata Consultancy Services (TCS) and Ishaat Hussain was installed as chairman in his place until a new chairman is appointed. The Mistry camp had called that move at TCS as one undertaken by Tata Sons in “pre-meditated haste”.
In the TGBL case, however, Mistry has been replaced after a meeting of the board of directors. Independent directors had openly come out in support of Mistry in the Indian Hotels Company Ltd and Tata Chemicals cases.
Bhat, in addition to his responsibilities for Marketing and Customer Centricity, was recently made responsible for managing the Tata brand as part of a major organizational reshuffle at the group after Mistry was replaced as the chairman of Tata Sons on October 24. He has also been given interim charge of strategy and business development at the group.
Mistry and Bhat apart, the TGBL board has Analjit Singh, Ranjana Kumar, V Leeladhar, Mallika Srinivasan and Ireena Vittal as independent directors. While S Santhanakrishnan is non-executive director, L Krishnakumar is executive director and Ajoy K Misra is managing director and CEO.
Mistry’s removal as chairman at TGBL comes at a time when the battle between the two sides has clearly escalated and Tata Sons has called extraordinary general meetings of some key group companies to eject not only Mistry but also Nusli Wadia, who sits on the boards of three Tata companies from the boards. The TGBL development also comes on a day when Mistry has rubbished charges of rising costs and impairments labelled against him by the Tata camp, putting out instead explanations why costs rose and attempting to put the blame on high-cost public relations agencies appointed by Ratan Tata and even on a “dual structure” where Tata was chairman emeritus and his office costs had to be also borne by Tata Sons.
The TGBL developments add a fresh new twist to the battle at Bombay House, and the focus is now set to shift to the multiple EGMs called by Tata Sons to get Mistry and Wadia out of the company boards.