Cyrus Mistry removed as Tata Global Beverages chairman, says move illegal
Tata Global Beverages on Tuesday removed Cyrus Mistry as chairman of the company which co-owns and runs Starbucks coffee stores across India, escalating a boardroom battle that erupted after his sacking as head of the $103-billion business empire.Cyrus Mistry Exit Updated: Nov 15, 2016 23:23 IST
Tata Global Beverages on Tuesday removed Cyrus Mistry as chairman of the company which co-owns and runs Starbucks coffee stores across India, escalating a boardroom battle that erupted after his sacking as head of the $103-billion business empire.
Non-executive director Harish Bhat has replaced Mistry, the company said in regulatory filing to the Bombay Stock Exchange (BSE).
In a sharp retort, Mistry described the decision as “inaccurate and illegal”.
Mistry’s removal came within hours of his office issuing a point-by-point rebuttal of the allegations made by Tata Sons, the conglomerate’s holding company.
In the statement, Mistry levelled charges against patriarch Ratan Tata, ranging from prompting group investments into friendly companies, to frittering away scarce resources on expensive public relations exercises.
The Tatas had said that under Mistry’s watch, expenses and impairments – write-downs in values of assets – had risen sharply. Mistry shot back saying expenditure and erosion were legacy issues.
“It is a brazen attempt to mislead the public and shareholders,” started Mistry’s response on the Tata charges, before going on to describe some of the investments made by Tata Sons before his tenure, as questionable.
“One investment in Piaggio Aero, a company in the aerospace sector with a friend of Mr Tata, was especially distressing. Tata Sons decided to exit the company at a commercial loss of Rs 1,150 crore,” said the statement without elaborating on the associate of Tata, or the company.
The website of Piaggio Aerospace describes it as a company “dedicated to cutting edge aviation technology.”
Mistry’s office also questioned a Rs 400 crore investment in Nagarjuna Refineries and in energy and chemical firm Sasol.
This is the second time that the ousted chairman has made charges against Ratan Tata. In an October 25 letter to Tata Sons board, Mistry had mentioned about supplies from Tata Motors’ Nano project being sent to an auto unit where Ratan Tata has investments.
Tata Sons did not respond to Mistry’s charges.