Image: Vivek Prakash / Reuters
Tata Sons, the flagship holding company of the salt-to-software conglomerate, appears determined to move forward with the process of removing Cyrus Mistry as chairman of all the group operating companies, irrespective of which way the independent directors of these firms align.
Despite the independent directors of the $103 billion-conglomerate’s hospitality arm Indian Hotel Co. Ltd (IHCL) expressing unanimous faith in the abilities of Mistry as chairman, Tata Sons, on November 10, requisitioned to convene an extraordinary general meeting (EGM) of IHCL’s shareholders to pass the resolution of Mistry’s removal as a director.
Mistry was replaced as chairman of Tata Sons on October 24, but he continued to be a director on the board of the company. Both sides refused to blink first and are digging in their heels in a power struggle that is escalating by the day.
Also, on November 10, Mistry was replaces as chairman of Tata Consultancy Services (TCS) with Ishaat Hussain, Tata Sons’ finance director, at the behest of the holding company and its majority shareholder Tata Trusts. Tata Sons has also called for an EGM at TCS to remove Mistry as a director on the board of that company too.
What is unfolding at the House of Tata is nothing short of civil war.
Late in the evening on November 10, Tata Chemicals also sent an intimation to the bourses regarding a meeting of the independent directors on the same day, wherein these directors reposed unanimous confidence in the Tata Chemicals chairman (Mistry), the board and the management of the company in the conduct of the company’s business.
“The independent directors also reaffirmed that all the decisions taken with regard to the operations and business of the Company had been taken by the Board unanimously and executed by the Chairman and management as per the directions of the Board,” Tata Chemicals’ notification to the bourses said.
Tata Chemicals also informed the stock exchanges on Friday that Bhaskar Bhat, a non-executive and non-independent director on the company’s board had put in his resignation on November 10. Bhat is the MD of another group company Titan.
Interestingly, one of the independent directors on the board of Tata Chemicals is Bombay Dyeing chairman Nusli Wadia, who is considered close to Mistry’s 78-year-old predecessor Ratan Tata, who came back to Bombay House as interim chairman after Mistry’s ouster. Wadia was instrumental in aiding Tata’s move to ease out the earlier satraps of the Tata Group including Russi Mody, Darbari Seth and Ajit Kerkar – who had emerged as independent power centres during the tenure of Ratan Tata’s predecessor JRD Tata.
Wadia is also a director on the board of Tata Steel and Tata Motors. Tata Steel’s board meeting is scheduled for Friday; and Tata Motors’ board will meet on November 14 to approve the respective quarterly financial results of these companies. It will be interesting to see which camp the independent directors of these companies align with.
Irrespective, Tata Sons’ move to call for EGMs at IHCL and TCS, may well be expected at other group firms.
On Friday evening, after market hours, Tata Motors and Tata Steel sent intimations to the stock exchanges stating that they had received requests from Tata Sons to call EGMs to seek the ouster of Mistry and Wadia. Tata Sons’ intention to oust Wadia as a director on the board of Tata Motors may well be followed up with similar moves at other group companies too.
VR Mehta, trustee of the Sir Dorabji Tata Trust, one of the Tata Trusts that collectively own 66 percent of Tata Sons, told CNBC-TV18 on Friday evening that Wadia had “orchestrated” support for Mistry at the Tata Chemicals board meeting and that the two were working in tandem.
As it becomes increasingly clear that old friends are turning foes in the Tata-Mistry battle, the fate of other independent directors of Tata group firms, who sided with Mistry, hangs in the balance.
Check out our Festive offers upto Rs.1000/- off website prices on subscriptions + Gift card worth Rs 500/- from Eatbetterco.com. Click here to know more.