Mistry’s ouster was on expected lines; Big questions remain on his future action.
Mumbai: Tata Sons on Monday ousted Cyrus Mistry, its former chairman as a director from the company’s board in an extraordinary general meeting (EGM) of its shareholders held in Mumbai, which was attended by Ratan Tata and N Chandrasekaran, the newly appointed chairman of Tata Sons.
The meeting of the shareholders to oust Mr Mistry from the board was convened in the wake of the bitter public spat between the group and its former chairman. Tata Sons alleged that Mr Mistry had leaked confidential information to the public and his conduct has caused enormous harm to the Tata group and its stakeholders, including employees and shareholders.
“The shareholders of Tata Sons Limited, at the EGM held today, passed, with the requisite majority, a resolution to remove Mr. Cyrus P. Mistry as a director of Tata Sons Limited,” Tata Sons said in a statement.
Mr Mistry had joined Tata Sons board as director in 2006 and became its chairman in 2012. He was removed as the chairman of Tata Sons on October 24, 2016.
After allegedly engaging in a bitter battle with the Tata Sons to wrest the management control of group firms, Mr Mistry suddenly announced his exit from all listed group firms and filed a petition before the National Company Law Tribunal challenging the decision of Tata Sons to remove him as the chairman. Mr Mistry filed another petition before NCLT seeking a stay on the proposed EGM of Tata Sons shareholders. The tribunal however refused to grant an interim stay following which he filed an appeal before the National Company Law Appellate Tribunal, which too refused to grant him any relief on the matter.
Tata Trusts hold 66 per cent stake in Tata Sons while Mistry’s family firm Shapoorji Pallonji Group holds 18.5 per cent stake.
“Given the way the legal battle between Tata Sons and Mr Mistry were going, his removal from the board of Tata Sons was on expected lines. However, the biggest question now is what happens next? Instead of escalating the matter further, it would be in the interest of both the parties to come together and resolve the disputes amicably,” said Amit Tandon, founder and MD of IiAS.