TCS vote shows need for governance in Tata Group: Ousted director Cyrus Mistry
A day after being voted out as Tata Consultancy Services director, Cyrus P Mistry said on Wednesday that over 70% of non-promoter shareholders either voted against the resolution to remove him or abstained.Cyrus Mistry Exit Updated: Dec 14, 2016 18:31 IST
A day after being voted out as Tata Consultancy Services director, Cyrus P Mistry said on Wednesday that over 70% of non-promoter shareholders either voted against the resolution to remove him or abstained.
He said the voting by minority shareholders of Tata Consultancy Services (TCS) has sent a strong signal that the need for governance reform at Tata group must not go unheeded.
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.”
Stating 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).”
Mistry was unceremoniously sacked in October as chairman of Tata Sons, the holding company of India’s most famous family conglomerate -- the $103 billion steel-to-salt Tata Group. The shock move saw company patriarch Ratan Tata reassert his authority over the sprawling group.
Tata Sons called for its operating companies to hold EGMs to oust Mistry from their various boards. TCS was the biggest to do so.
Tata Industries removed Mistry as director on Monday. Other group companies including Indian Hotels Co. Ltd, Tata Steel, Tata Motors, and Tata Chemicals are scheduled to hold EGM’s in the next week to decide Mistry’s fate.
The ousted group chairman, however, has vowed to continue to work at various forums to be the voice for change in the Tata group, its governance and protection of stakeholders’ rights, even as Tata Teleservices said its shareholders ‘unanimously’ passed a resolution to remove Mistry as director.
“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,” he further said in the letter.
The voting in TCS is therefore, a strong signal from minority shareholders that the need for governance reform must not go unheeded, he added.
According regulatory filing of the extraordinary general meeting (EGM) held on Tuesday, 86.71% of the 197.04 crore shares voted. Of the votes polled, 93.11% voted for his removal and 6.89 per cent were against the resolution brought by the promoter, Tata Sons Ltd.
Out of the 8.78 crore retail shareholders, 1.55 crore voted on the resolution, 78%, or 1.21 crore of which voting against the resolution. But this vote against the resolution may have included Mistry’s own votes as well.
According to the latest annual report of TCS, Mistry held 41.63 lakh shares or 0.21% 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.
His shareholding made up for 35% of the negative vote for the resolution. Interestingly, less than 18% of the 8.78 crore retail shareholders voted.
According to the regulatory filing, all of the 144.48 crore promoter-held shares, constituting 73.32% of the total shareholding, voted for the resolution to remove him.
Of the 43.79 crore institutional holding, 56.69% participated in the poll, with 14.25 crore favouring Mistry’s removal and 10.55 crore being against the resolution.