Tata Motors board steers clear of Mistry feud, clears all decisions by company
The board of Tata Motors appeared to stay clear of an escalating feud between ousted Tata Sons chairman Cyrus Mistry and group patron Ratan Tata on Monday, with independent directors unanimously approving the decisions taken by company, including on its small car, the Nano.Cyrus Mistry Exit Updated: Nov 14, 2016 23:44 IST
The board of Tata Motors appeared to stay clear of an escalating feud between ousted Tata Sons chairman Cyrus Mistry and group patron Ratan Tata on Monday, with independent directors unanimously approving the decisions taken by company, including on its small car, the Nano.
The board meeting had assumed significance after Tata Sons, the Tata group’s holding company, called for emergency general meetings to remove Mistry and independent director Nusli Wadia from Tata Motors. Mistry continues to be chairman of some group companies, including Tata Motors.
“The independent directors have confirmed that all decisions taken by the board with regard to strategy, operations and business of the company have been unanimous and executed by the chairman and the management accordingly,” a Tata Motors statement said.
The stance indicates that Tata Sons and the chairman of Tata Motors did not escalate Monday’s meeting, preferring to let matters be. People close to Mistry said the Tata Motors’ statement “in a way backs what we have been saying… that actions taken by Mr Mistry have improved the company”.
But others said the board’s support for Nano, a pet project of Ratan Tata, should be seen as a setback for Mistry, who had criticised the strategy behind what was once the world’s cheapest car.
To be sure, however, the stand of the board of Tata Motor is a departure from that of the board meetings of Indian Hotels and Tata Chemicals, where independent directors supported Mistry, prompting censure from Tata Sons in the form of calls for the removal of Mistry and Wadia as directors.
“The independent directors have further affirmed that the company continues to be governed, supervised and managed under the guidance and direction of the board,” the Tata Motors statement added.
“The management of the company and its subsidiaries have the full confidence and support of the independent directors.”
The country’s largest commercial vehicle maker swung to a consolidated net profit in the second quarter of FY 2015-16, backed by strong sales at Jaguar Land Rover and improved performance of new passenger car models launched by the Indian subsidiary.
Tata Motors is crucial for the Tata group as 90% of its profits come from JLR and Tata Consultancy Services, which underscores the Tatas’ desire to have control of the automaker.