The board of Tata Global Beverages, which co-owns and runs Starbucks coffee stores and several tea brands, has voted to remove Cyrus Mistry as chairman, becoming the second company in the $103 billion Tata group to remove the former Tata Sons chairman as the head of the board. This is perceived to be a setback to Mistry who later said the board’s move is “inaccurate and illegal”.
Soon after the board meeting, Mistry said “the developments at the meeting of Tata Global Beverages is nothing but a repeat of the illegality that the board of directors of Tata Sons did on October 24”. “The meeting was conducted by Mistry as chairman and was concluded. The statement made to stock exchanges is therefore inaccurate and illegal and it is but a repeat of exactly the same illegal acts done by Tata Sons on October 24,” Mistry said.
“After extensive deliberations, and keeping in view the long term interest and alignment of all stakeholders and stability of the company, the Board of Directors resolved to replace Cyrus P Mistry as Chairman of the Company, by majority vote, with 7 out of the 10 Directors present at the board meeting, voting in favour of the resolution,” said Tata Global in a statement to the BSE.
Mistry, who was ousted as Tata Sons chairman on October 24, will be replaced by the company’s former MD and CEO Harish Bhat, who is now a non-executive director of the company. Seven out of 10 directors voted for Mistry’s ouster, making Tata Global Beverages the first company board to vote against Mistry. According to Mistry, the Tata group 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 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 Mistry was sought to be moved, it was ruled out by the chairman since it was not on the agenda,” he said. Two independent directors Darius Pandole and Analjit Singh opposed the bid at committing these illegal acts. “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,” Mistry said.
Earlier, Tata Sons, the holding company of the Tata group, had sacked Cyrus Mistry as the chairman of Tata Consultancy Services (TCS), the most valued Indian listed company, under its Articles of Association, bringing in Ishaat Hussain as the new chairman of the software services firm and signalling the start of a process to remove Mistry from other group companies and regain control.
Tata Global Beverages, the maker of Tetley tea, has six independent directors — former RBI Deputy Governor V Leeladhar, TAFE chairman Mallika Srinivasan, former McKinsey partner Ireena Vittal, Max India group chairman Analjit Singh, former Nabard chairman Ranjana Kumar and New Silk Route partner Darius Pandole.
On Monday, independent directors of Tata Motors on Monday backed the management of the company but failed to reaffirm their unanimous faith in Mistry. The Tata group had last week issued notices to three Tata group companies — Tata Steel, Tata Motors and Tata Chemicals — to oust Mistry, who is chairman of all the three companies, and Nusli Wadia, who switched sides from the Tatas to the Mistry camp, from the boards of these companies. Once Mistry is removed as a director, he will automatically cease to be the chairman of the boards of these companies. TCS and Indian Hotels Company had earlier convened extra-ordinary general meetings of shareholders to sack Mistry as director on their boards.
However, the Tatas faced setback in two group firms. Independent directors of Tata Chemicals supported Mistry after considering earlier assessment and evaluation of the chairman in the previous board meetings.
For all the latest India News, download Indian Express App nowFirst Published on: November 16, 2016 1:54 am