February 7, 2017 5:45:16 am
After removing Cyrus Mistry as Director of various Tata group companies, shareholders of Tata Sons on Monday voted to oust Mistry, its former Chairman, as a Director from the company with “requisite majority” in an extraordinary general meeting held at Bombay House, the headquarters of the $103-billion Tata group.
“The shareholders of Tata Sons Ltd, at the extraordinary general meeting held today, passed, with the requisite majority, a resolution to remove Cyrus P Mistry as a Director of Tata Sons,” said a statement from Tata Sons. While Tata Sons said Mistry was removed with “requisite majority”, corporate sources said the Mistry family which holds around 18.5 per cent stake in Tata Sons would have voted against the resolution. The exit of Mistry from the Tata Sons board was a foregone conclusion as the Tata Trusts hold over 66 per cent stake in the company while other Tata group companies hold another 14 per cent stake.
While the meeting was attended by Tata Sons Interim Chairman Ratan Tata, N Chadrasekaran, who will take over as Tata Sons chairman on February 21 and other Tata Sons directors including Ajay Piramal, Mistry did not attend the
Mistry family’s association with the Tatas started in 1930 when Shapoorji Pallonji Mistry bought 12.5 per cent in Tata Sons from the FE Dinshaw Estate. The Mistrys later acquired more stake from the Tata family, taking the SP Group’s holding to about 16.5 per cent. Mistry invested over Rs 60 crore in the Tata Sons rights issue in the ’90s to maintain his stake in the Tata company.
JRD Tata, who became the Tata Group chairman in 1938, initially did not like the idea of Mistry acquiring a major stake in Tata Sons. However, they patched up later and maintained a good relationship for the last two decades. This association was cemented when Pallonji Mistry’s daughter Aloo married Noel Tata, the half-brother of Ratan Tata.
Mistry, who was the second person from outside the Tata family to head the group in the last 142 years of its existence, was able to control the group for just four years, one of the shortest tenures for a Tata group head.
After differences of opinions with group patriarch Ratan Tata, 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), which did not grant any interim relief to him. The next hearing is scheduled on February 13th in Mumbai.
On February 3, the Mistry camp failed to get any relief from the National Company Law Appellate Tribunal (NCLAT) which dismissed the petitions by two investment firms, backed by Mistry family, to stay February 6 EGM of Tata Sons to remove the ousted chairman from the board. The NCLAT declined to stay the scheduled EGM of Tata Sons, and during the proceedings it suggested parties to go for an “honourable settlement” as it was denting the image of both sides and may hurt their business interests and morale of their employees as well.
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