Friday, November 4, 2016

Tata vs Cyrus Mistry's fued still continue, his unanimous removal from group companies unlikely

Tata Sons may have sizeable shareholding in some group companies but it may not be enough to secure the exit of Cyrus Mistry as chairman of these firms, many independent experts and lawyers said.

Mistry, former chairman of Tata Sons is chairman of heavyweight group companies such as Indian Hotels, Tata Chemicals, Tata Power, Tata GlobalBSE -3.81 % Beverages, Tata Motors and Tata SteelBSE -0.06 %. He was ousted as chairman of Tata Sons, the group holding company, on October 24.

It is very unlikely that members of the boards of some of the group companies will vote in favour of any resolution to remove Cyrus Mistry unanimously, said a person who is an independent director on the boards of two Tata companies.

He elaborated that all decisions taken by boards of companies were collective ones and that they were approved by all board members. On many occasions, strategic decisions were initiated at the behest of board members other than Cyrus Mistry, he added.

Late on Friday, the independent directors of Indian Hotels praised Mistry and expressed full confidence in his leadership. 

More than half the board members of the seven major group companies are independent directors and Tata Sons is majority shareholder in only one of them, software behemoth TCS. These independent directors have been working with Mistry for some years and have also supported many of the decisions taken by him and other members of the board.

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