Tata Sons interim Chairman Ratan Tata on Wednesday said the continued presence of Cyrus Mistry in respective company boards is a serious “disruptive influence” which can make the companies “dysfunctional, particularly given his open hostility towards the primary promoter, Tata Sons”.
In a letter to the shareholders seeking their support to the special resolution moved by Tata Sons to remove Mistry as director from group companies, Tata said Mistry was removed as the chairman as Tata Sons board lost confidence in him and his ability to lead the conglomerate. He said the “deliberated action” to remove Mistry by the Tata Sons board was taken after relationship with him steadily deteriorated and “several attempts to remediate went unheeded”.
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Following special resolutions moved by Tata Sons to remove Mistry as director, TCS has called an EGM on December 13, Indian Hotels Co Ltd on December 20, Tata Steel on December 21, Tata Motors on December 22, Tata Chemicals on December 23 and Tata Power on December 26.
Tata said Mistry was appointed as a director of various Tata group companies only as a corollary to his being the Chairman of Tata Sons. “The right step would have been for him to resign as director. Unfortunately, he has not yet done so and his continued presence as a director is a serious disruptive influence on these company boards, which can make the company dysfunctional, particularly given his open hostility towards the primary promoter, Tata Sons,” Tata said in the letter.
Tata said Mistry was offered an opportunity to step down voluntarily from the chairman position, which he rejected. Justifying the move to sack Mistry, Tata said: “The board of Tata Sons lost confidence in him and in his ability to lead the Tata group in the future.” This deliberated action by the Tata Sons board was taken after several attempts to remediate went unheeded. “As a final step he was offered an opportunity to step down voluntarily from the chairman position, which he rejected and said that it should be taken up at the board,” Tata said, adding this was done and Mistry was replaced.
Assuring the shareholders, Tata said as the promoter Tata Sons will constantly evaluate new business opportunities and invests in creating new enterprises.