TCS shareholders to vote on Cyrus Mistry removal today

On November 10, Tata Sons, the holding company of the Tata group, has sacked Cyrus Mistry as the chairman of Tata Consultancy Services (TCS), bringing in Ishaat Hussain as the new chairman of the software services firm. Tata Sons then issued a special notice and a requisition for convening an extraordinary general meeting of TCS to consider a resolution for the removal of Cyrus P Mistry as director of the company.

Mistry was removed as the chairman of TCS under the Articles of Association which state that as long as Tata Sons and its associates hold at least 26 per cent of the paid up equity capital of the company, Tata Sons — which holds over 73 per cent stake in TCS — will have the right to nominate the chairman of the board of directors.

As the boards of various Tata companies will be meeting over the next few weeks, the Tatas are likely to move strategically to oust Mistry from these boards. Mistry is the Chairman of several major group companies — Tata Steel, Tata Motors, Tata Power and Tata Global Beverages — where the Tatas don’t have a majority. Mistry had recently alleged that Tata once tried to sell the IT firm to IBM and his “ego” led to bad business decisions like Corus acquisition at double the original cost. However, he changed his stance later stating his statement was based on “information from sources who were close to JRD Tata who informed him that it was Ratan Tata’s intention, and not the group’s intention, to sell TCS”.

Tuesday’s voting by TCS shareholders will be the first of six such EGMs called by major listed firms — Indian Hotels Co Ltd (December 20), Tata Steel (December 21), Tata Motors (December 22), Tata Chemicals (December 23) and Tata Power (December 26) — to seek Mistry’s ouster as director.

However, in the case of Tata Motors, Tata Steel and Tata Chemicals, the shareholders will also be voting for a resolution moved by Tata Sons to remove Nusli Wadia as independent director.

Tata Sons has been stepping up the pressure on Mistry ever since he was sacked as chairman of the company on October 24. It had made several allegations against Mistry, including betraying trust and trying to gain control of major operating firms, concentrating powers and using free-hand given to him to weaken management structures of the Tata Group.

Last week, in a letter to shareholders of the companies, Tata stated that the continued presence of Mistry in their respective boards was a serious “disruptive influence” and could make the companies “dysfunctional”. Mistry on Sunday said Ratan Tata’s conduct has eroded the Tata brand and values materially. “Mistry’s family as the owner of over 18% interest in Tata Sons is as injured by any injury caused to Tata Sons. Far from hurting the Tata Sons businesses intentionally, Mistry is saving the Tata group from the whimsical ineptitude of Ratan Tata,” the office of Mistry said in statement.

Mistry ousted as Tata Industries director

Mumbai: Former Tata Sons chairman Cyrus Mistry was on Monday removed as director of Tata Industries following a shareholders’ vote at the EGM. This is the first instance of Mistry being ousted from the board since his removal as Tata Group chairman. Mistry also ceases to be the chairman of the company following his removal as director, Tata Industries said.

Tata Industries is a subsidiary of Tata Sons. Several Tata companies, including Tata Motors, Tata Power, Tata Steel, hold equity in the company. Tata Industries was set up by Tata Sons in 1945 as a managing agency for the businesses it promoted. Following the abolition of the managing agency system, Tata Industries’ mandate was recast, in the early 1980s, to promote Tata’s entry into new and high-tech businesses.

Nusli Wadia hits back at Tatas 

Mumbai: Tata Steel independent director Nusli Wadia on Monday hit back at the Tatas, saying he has been targetted for his “independence of mind and action” and he “is not required to act in their interest as he does not serve the Tata group” in any capacity.

In a letter to the shareholders of Tata Steel, which has convened an EGM on December 21 to consider a resolution by Tata Sons to remove Cyrus Mistry and him as directors, Wadia said the allegation that he has acted in concert with Mistry as “totally false and baseless.” “My actions as an independent director are totally independent and not linked to any individual,” Wadia said.

On the allegation that he was acting against the interest of the group, he said: “I do not serve the Tata group in any capacity and I am not required to act in their interest. The statement is irrelevant to my position as an independent director of Tata Steel. It is also baseless and unsubstantiated.” “My independent stand has aggravated Tata Sons and my removal is being sought because I chose not to follow their diktat…,” he said. ENS