Tata Sons, the governing board of the $103 billion salt to software conglomerate, Tata Group, has called a shareholders’ meeting on February 6 to remove Cyrus Mistry as director of the holding company.
Mistry was ousted as the chairman of Tata Sons on October 24, as Ratan Tata was reinstated as the interim chairman, over issues of non-performance.
Subsequently, Mistry resigned from the board of six companies, and dragged Tata Sons and his interim successor Ratan Tata to the National Company Law Tribunal.
The move was unprecedented as Shapoorji Pallonji, the business house promoted by Mistry’s family owns 18.4% stake in Tata Group. Even after the ouster Mistry continued as the member of the board of Tata Sons.
“Subsequent to his replacement, Mistry has made certain unsubstantiated allegations, which cast aspersions not only on Tata Sons Limited and its board of directors, but also on the Tata group as a whole. Internal communications, including confidential, were made public. Mistry’s conduct has caused enormous harm to the Tata group and its stakeholders, including employees and shareholders,” Tata Sons said in a note for extraordinary general meeting (EGM).
The note also mentioned that the ousted chairman’s conduct “resulted in significant erosion of the market value of the Tata group companies, which has consequently resulted in harm to Tata Sons Limited and indirectly losses to its shareholders”.
The continuation of Mistry as a Director of Tata Sons is “untenable” and therefore, he should be removed, the note concluded.
The resolution, which has been moved for his removal, said: “The board of Tata Sons Ltd is of the view that the integrity of the board proceedings is being jeopardised by Mistry’s continuation as a Director and the confidentiality of the board decisions and proceedings cannot be ensured as the documents presented to the board have been leaked and made public in a distorted and untruthful manner.”
(with agency inputs)