Mistry out of Tata Teleservices, says he will continue to fight
Tata Sons scored yet another victory on Wednesday, with the unlisted Tata Teleservices removing Cyrus Mistry as director of the company at an extraordinary general meeting (EGM).business Updated: Dec 15, 2016 10:40 IST
Tata Sons scored yet another victory on Wednesday, with the unlisted Tata Teleservices removing Cyrus Mistry as director of the company at an extraordinary general meeting (EGM).
With this, former group chairman Mistry has been removed as director from three Tata companies, including the unlisted Tata Industries and listed Tata Consultancy Services (TCS).
The major shareholders of Tata Tele include Tata Sons (36.17%), NTT Docomo (26.5%), Tata Communications (9.33%), Tata Power (6.97%), Tata Industries (5.46%), Tata Steel (1.37%) and Tata Capital (1.32%).
Tata Tele had featured in the legacy hotspots that Mistry had mentioned in one of his first letters to Tata Sons, where the former chairman said that venturing into telecom was not a viable business decision.
The litigation between the Tatas and Japan’s NTT Docomo has been continuing for sometime now, with Docomo invoking a joint venture clause, which stipulates that the Tatas will have to buy out the Japanese company’s stake after five years. However, RBI rules limit pre-decided stake purchases.
The case is in arbitration and the Tatas have already been directed to pay $1.17 billion by an international court.
Tata Sons has alleged that the case was not handled efficiently by Mistry, as a result of which it has ballooned into such a big legal dispute.
Tata Sons is likely to relook at the issues that Mistry had raised ahead of the start of the various EGMs that the group has convened. The move has been prompted by the vote at TCS on December 13, with a large chunk of the non-promoter holding voting against the resolution to remove Mistry.