Mistry Wants Ratan Tata Restrained From Attending Board MeetingsBy , , and
Battle not about position but about governance reform: Mistry
Aggressive Tata stance forced Mistry to exit company boards
Cyrus Mistry, the ousted chairman of Tata Sons Ltd., wants an Indian court to restrain the family scion from attending board meetings, according to a filing made by the executive against his abrupt dismissal from the post.
Mistry also asked the National Company Law Tribunal to appoint an administrator to manage Tata Sons, according to the filing seen by Bloomberg. Mistry’s office confirmed the filing. Mistry, who earlier this week resigned from six group companies, in an interview on Tuesday said that he will take his fight for better transparency at the $100 billion group to court. Tata Sons “will contest the allegations,” the company said in a statement.
Mistry’s steps to take the legal route are the latest twist in a battle that began with his removal from group holding company Tata Sons in October. Ratan Tata, the patriarch who mentored Mistry for the chairman job in 2012 and replaced him in October, is re-asserting control at the group, which has products ranging from the luxury Jaguar Land Rover cars to table salt. After weeks of bitter public accusations and recriminations between the two, Mistry said he plans to go to a larger “external forum” with his grievances.
“My fight will actually continue, and not only continue, it will strengthen,” Mistry said in the interview in Mumbai. “The larger platform is partly on the legal platform. There will be other platforms as well which I don’t want to discuss.”
The former head of Tata Sons also asked the court to ensure that the company, which is 18.37 percent owned by Mistry’s family, doesn’t issue any securities which results in equity dilution. Other pleas made by Mistry include:
- Investigation into the role of trustees of Tata Trusts in operations of Tata Sons and Tata group companies and to prohibit them from interfering in affairs of the group.
- Calls for an independent auditor to conduct a forensic audit, independent investigation into transactions of Tata Sons.
- Asks for inspector to investigate breach of capital market regulations.
- Calls attention to illegal removal of Mistry as executive chairman of Tata Sons without notice, explanation.
"The key test will be as to whether the affairs of the company were conducted in a manner prejudicial to the interests of the shareholders or the company,” said Ramesh Vaidyanathan, managing partner at law firm Advaya Legal. The hearings are likely to center around the process of removal of Mistry as chairman and corporate governance issues, he said.
The feud, which has now dragged on for almost two months, wasn’t about his own position but about reforming the organization and ensuring the process for selecting the next chairman was transparent, Mistry said. Tata Sons in the statement on Tuesday said that filing of the law suit reflects “his deep animosity” toward Ratan Tata.
Ratan Tata and four other prominent leaders -- Venu Srinivasan, Amit Chandra, Ronen Sen and Kumar Bhattacharyya -- are part of a panel formed to find a new Tata Sons chairman by the end of February.
Mistry will remain a director on the holding company’s board “as long as they keep me,” he said.
Mistry said he decided to leave the boards of Tata Steel Ltd., Tata Power Co., Tata Motors Ltd., Tata Chemicals Ltd., Tata Global Beverages Ltd. and Indian Hotels Co. on Monday due to the “coercive and aggressive” stance of Tata Sons, which meant these organizations risked losing the Tata brand name and financial support, should he stay with the firms. Shareholders of Tata Consultancy Services Ltd. last week removed Mistry as a director.
Tata Sons had warned Nov. 13 that boards of the conglomerate’s listed companies must ensure their future is protected and pledged to do “whatever is required” to deal with the situation.
“It is now important for both parties to move forward in a constructive way,” said Vimal Bhandari, managing director and chief executive officer at IndoStar Capital Finance, who studies family-run conglomerates. The Tata group needs to bring in clear-cut governance structures and the right leadership, while Mistry needs to put forward specific ideas on how to ensure better management and performance within the group, he said.
“It is time for mutually respectful dialogue and discussions, not more acrimonious legal fights," Bhandari said.
— With assistance by Harsha Subramaniam, and Swansy Afonso