MUMBAI One key reason for Cyrus Mistry’s sacking was the displeasure of Tata Trusts in not receiving enough dividends on their shares. On Tuesday, VR Mehta, trustee at the Sir Dorabji Tata Trust, which holds a 27.98% stake in Tata Sons, said as much in an interview to NDTV.
However, a look at Tata Sons’s filings with the Registrar of Companies shows that the firm’s dividend distribution has been steady. It distributed R283 crore as dividends to ordinary shareholders in each of the fiscal years from 2008 to 2010. From fiscal 2011 to fiscal 2016, the dividend paid has been R323 crore, except for one year. In fiscal 2015, Tata Sons gave out R647 crore to shareholders because of a special dividend received from Tata Consultancy Services Ltd (TCS), where it holds close to 73.5%.
Earlier this year, the Trusts withdrew R3,951 crore by redeeming preference shares they held in Tata Sons, according to the latter’s directors’ report for 2015-16. These shares were redeemed about 10 years before maturity.
In the four fiscal years from 2013 to 2016, essentially Mistry’s regime, the average dividend received by Tata Sons was R6,855 crore, a number boosted by the one-off TCS dividend. Adjusted for that (assuming the same dividend for fiscal 2014 and 2015), the average dividend was R5,018 crore. In the four years preceding that, the average dividend received was R2,730 crore.
{{/usCountry}}In the four fiscal years from 2013 to 2016, essentially Mistry’s regime, the average dividend received by Tata Sons was R6,855 crore, a number boosted by the one-off TCS dividend. Adjusted for that (assuming the same dividend for fiscal 2014 and 2015), the average dividend was R5,018 crore. In the four years preceding that, the average dividend received was R2,730 crore.
{{/usCountry}}Still, the compound annual growth rate of dividends received during the Mistry years was 18.1%, a slowdown from the 21% growth in the four preceding years when Ratan Tata was chairman.
The contention that the group was increasingly dependent on TCS and JLR is true to a certain extent, but it is a matter of degree.