Tata Sons Shareholders Vote to Remove Cyrus Mistry from Board of Directors

Bombay House EGM last in a series to oust Mistry from group

Shareholders of Tata Sons, in an extraordinary general meeting (EGM) on Monday afternoon, voted to remove former chairman Cyrus Mistry as director of the company. The meeting took place at the Bombay House, the headquarters of the $103-billion group.

The meeting was attended by Tata Sons interim chairman Ratan Tata, N Chandrasekaran, who will take over as Tata Sons chairman on February 21, and other Tata Sons directors, including Ajay Piramal. Mistry did not attend the meeting. A one-line statement from Tata Sons said Mistry has been removed with a “requisite majority”, without giving any details. The EGM was called by the Tata Trusts, chaired by Tata.

The exit of Mistry from the board was a foregone conclusion as the Tata Trusts hold a 66% stake in the company, while the Tata group companies hold another 14%. The Mistry family owns an 18.5% stake, while the rest is owned by Tata family members.

The Mistrys do not have any nomination right on the board of Tata Sons. Sources said Mistry’s brother-in-law and Ratan Tata’s half-brother, Noel Tata, voted in favour of the resolution through proxies, though he directly holds minuscule shares in the company.

Old relations between the Tatas and the Mistrys seem to have reached a bitter end on Monday.

The Mistry family had first acquired shares in Tata Sons in 1965 and Pallonji Mistry, Cyrus’s father, was appointed as Tata Sons director in 1980. He retired in 2004. Cyrus, 48, joined two years later as director and became chairman in 2012. Mistry was ousted as a chairman on October 24 last year, in a surprise move by the Tata Sons board.

Mistry later moved the National Company Law Tribunal (NCLT) against Tata Sons’ EGM, but did not get any interim relief. The next hearing is scheduled on February 13 in Mumbai.

Mistry’s allegations and counter allegations, meanwhile, hurt the Tata brand which dropped in Brand Finance’s top 100 global listing to 103 from last year’s 82.  

Reference - http://www.business-standard.com/article/companies/tata-sons-shareholders-vote-to-remove-cyrus-mistry-from-board-of-directors-117020600619_1.html