Independent directors of the Tata group’s Indian Hotels unanimously expressed full confidence in chairman Cyrus Mistry on Friday, praising the “steps taken by him in providing strategic direction and leadership to the company”.
Amid chaos and skirmishes between the security guards and the media outside Bombay House in Mumbai, Indian Hotels held its board meet with Cyrus Mistry in the chair -- the first for a Tata Sons firm after the 49-year-old industrialist was ousted as the group chairman.
While Mistry has been removed as chairman of Tata Sons, he is still chairman of some of the key listed group companies such as Indian Hotels Co, Tata Motors, Tata Communications and Tata Steel.
Even as the company deliberated on the second quarter results and reported a net consolidated loss of Rs 38.38 crore, against Rs 116.79 crore for the like quarter of the previous year, not much emerged on the actual atmospherics of Friday’s meeting. But in a statement later, independent directors expressed full confidence in the chairman.
“Taking into account board assessments and performance evaluations carried out over the years, the independent directors unanimously expressed their full confidence in the chairman, Cyrus Mistry, and praised the steps taken by him in providing strategic direction and leadership to the company,” it said.
{{/usCountry}}“Taking into account board assessments and performance evaluations carried out over the years, the independent directors unanimously expressed their full confidence in the chairman, Cyrus Mistry, and praised the steps taken by him in providing strategic direction and leadership to the company,” it said.
{{/usCountry}}The announcement came on the day Tata Sons put in place a new management team for the $100 billion steel-to-software group, days after its board ousted chairman Mistry and disbanded his advisory council, triggering a public spat between him and Ratan Tata.
“After deliberations, the independent directors came to a view that being a listed company, it was imperative for the independent directors to state their views to the investors and public at large, such that those who trade in securities of the company make an informed decision,” the statement said.
The company’s said in a regulatory filing that its consolidated total income from operations stood at Rs 884.95 crore, against Rs 894.37 crore. Among other items, it also reported a loss of Rs 103.07 crore on account of the sale of Boston property.
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After his ouster as Tata Sons chairman, Mistry had charged the management of Indian Hotels with selling properties at a loss.
“The onerous terms of the lease for Pierre in New York are such that it would make it a challenge to exit,” he had said in a letter to the Tata Sons board, soon after his ouster, which made its way to the media and raised several queries.
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“Indian Hotels, beyond flawed international strategy, had acquired the Searock property at highly inflated price and housed in an off balance sheet structure. In the process of unravelling this legacy, Indian Hotel has had to write down nearly its entire net worth over past three years,” he said.
“This impairs its ability to pay dividends.”
The developments have had an impact on the stock prices of the company. In the eight trading sessions since his removal, the shares of Indian Hotels have fallen nearly 14%-- from Rs 129.75 to Rs 112.
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