Ratan Tata in a letter to shareholders sought support for removal of Cyrus Mistry as director, citing latter’s continued presence would be a serious disruptive influence on the company boards which can make the companies dysfunctional.
“Now we seek you support of the resolution that Tata Sons has moved in the forthcoming EGM of our companies, for removal of Cyrus Mistry as director. Mr. Cyrus Mistry was replaced as chairman of Tata Sons, after four years in that Role, on October 24, 2016, because the board of Tata Sons lost confidence in him and his ability to lead the Tata Group in future,” said Ratan Tata in his letter, a week ahead of the extra general body meetings of the boards of various Tata companies.
“As you would expect, this deliberate action by Tata Sons board was taken after the relationship with Mr. Mistry steadily deteriorated, and several attempts to remediate went unheeded.”
Tata Sons interim chairman’s letter follows ousted chairman Cyrus Mistry’s written 15-page representations to shareholders on December 5 citing reasons as to why he should not be removed as director from Tata group firms.
Mr. Mistry has refused to voluntarily step down as chairman and director from listed Tata companies, creating a split in power at the Group with independent directors of some of the Tata firms coming in support of Mr. Mistry to continue as chairman.
Final step
“As a final step, he was offered an opportunity to step down voluntarily from the chairman position, which he rejected, and said that it should be taken up mat the board. This was done and he was formally replaced. Since Mr. Mistry was appointed as director of various Tata Group companies only as corollary to his being the chairman of Tata Sons and the right step for him would have been to resign as director,” said the interim chairman.
The letter addressed to shareholders signed by Ratan Tata tried to ward off shareholder concerns raised by Mr. Mistry on corporate governance and business decisions as he said Tata Group’s decisions were based on maximising long-term shareholder value, and this will continue to be the case, whether it is non-profitable units like Tata Steel Europe or successful entities like TCS or JLR.
