Within days of Cyrus Mistry’s ouster as Chairman of Tata Consultancy Services, the IT giant on Thursday decided to convene an extraordinary general meeting on December 13 to seek shareholders’ nod for removing him from the board. Earlier on Thursday, the board of Tata Group’s crown jewel TCS met for the first time under the newly-appointed Chairman Ishaat Hussain.
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Mistry, who is a director, was not present. The EGM will be held on Tuesday, December 13, 2016 at 3.30 pm, and the latest salvo marks an escalation in boardroom battle at Tata Group companies.
“…the Board of Directors of the company, at its meeting held on November 17, 2016 has decided to convene an EGM pursuant to the Special Notice & Requisition dated November 9, 2016 sent by Tata Sons, shareholder of the company holding 73.26 per cent of the paid-up equity share capital of the company, to consider and if thought fit, to pass a resolution for removal of Mr CP Mistry as Director of the company,” TCS said in a BSE filing.
The board of country’s largest software company met at its office in downtown Mumbai this morning, but the directors were tight-lipped about any decision.
Tata Sons last week replaced Mistry with Hussain as Chairman of TCS, a move seen as an attempt by Ratan Tata-led promoter group to tighten grip over the $ 100 billion salt-to-software conglomerate.
Tata Sons had made use of one of the statutes that makes it possible to nominate the chairman of the board, while replacing Mistry with group veteran Hussain.
In a sudden and dramatic turn of events last month, Mistry was unceremoniously removed as the Chairman of Tata Sons and replaced by his predecessor Ratan Tata in the interim, triggering a confrontation between the single-largest shareholder and the company’s founding family.
In the high-decibel corporate drama that followed, Mistry accused Tata Sons of cornering him into being a “lame-duck” chairman in the near four-year tenure, and also hiding $ 18 billion of potential write-downs across five group firms, including Tata Motors and Tata Steel Europe.
He also alleged that there were potential financial issues at the various companies and violations of securities regulations.
Hitting back, Tata Sons said its former chairman was fully empowered to lead the group and its companies but had “overwhelmingly” lost the confidence of board members. Ratan Tata had also lashed out at him saying Mistry’s removal was absolute necessary for group’s future success.
In the days that followed, Mistry was removed as Chairman of Tata Global Beverages Ltd, besides TCS. He continues to be Chairman IHCL, Tata Motors and Tata Chemicals.