A day after Cyrus Mistry was voted out of the Tata Consultancy Services (TCS) board, Tata Teleservices on Wednesday said Mistry has been removed as chairman and director of the company after its shareholders “unanimously” passed a resolution moved by Tata Sons for his ouster from the board.
Tata Teleservices is the third Tata group company after Tata Industries and TCS to remove Mistry, who was ousted as Tata Sons chairman on October 24, from the board.
An ordinary resolution was “passed unanimously” at the extraordinary general meeting (EGM) of the company, as a result of which Cyrus P Mistry has ceased to be a director and consequently chairman of the company with immediate effect, Tata Teleservices said. The board of directors of the company had called the EGM based on the special notice and requisition by Tata Sons, which holds 36.17 per cent of equity shares of the company, on November 9, it said. Tata Teleservices is one of the promoters of the listed firm Tata Teleservices (Maharashtra) Ltd.
Meanwhile, in a letter of thanks to the public shareholders of TCS, Mistry said: “I wish to remind all that polls at shareholder meetings are not a reflection for clamour for office or retribution for the breakdown in the rule of law in the Tata Group in recent weeks.”
Saying that the outcome of TCS EGM was a foregone conclusion, he said: “Over 70 per cent of non-promoter TCS shareholders either voted against the resolution to remove me or abstained. This meant nearly 20 per cent of the total votes in TCS (the promoters hold 73 per cent of the total vote). A reported 78 per cent of the votes cast by retail investors was against the resolution to remove me and nearly 43 per cent of the votes cast by institutional investors were against the resolution to remove me.” The voting in TCS is therefore, a strong signal from minority shareholders that the need for governance reform must not go unheeded, he claimed.
Out of the 8.78 crore retail shareholders, 1.55 crore voted on the resolution, 78 per cent, or 1.21 crore of which voting against the resolution. Corporate circles said this vote against the resolution may have included Mistry’s own votes as well. The latest annual report of TCS says Mistry held 41.63 lakh shares or 0.21 per cent shares of the company as on March 31, 2016. Considering he would have voted against the resolution brought by Tata Sons, less than half of the negative votes for the resolution may be his own. Interestingly, less than 18 per cent of the 8.78 crore retail shareholders voted.
Tata group is entangled in a legal tussle with Japanese firm, NTT DoCoMo. DoCoMo had in November 2009 acquired 26.5 per cent stake in Tata Teleservices for about Rs 12,740 crore (at Rs 117 per share) with an understanding that in case it exits the venture within five years, it will be paid a minimum 50 per cent of the acquisition price. DoCoMo, in April 2014, decided to exit the joint venture that struggled to grow subscribers quickly and sought Rs 58 per share or Rs 7,200 crore from the Tatas. But the Indian group offered Rs 23.34 a share in line with RBI guidelines that states that an international firm can only exit its investment at a valuation “not exceeding that arrived at on the basis of return on equity”. The Japanese firm then dragged the Tatas to international arbitration where it won a $1.17 billion award. With PTI