Tata Sons Ousts Mistry From Board, Ending Months-Long Sagaby
Director Cyrus Mistry removed Oct. 24 as chairman of group
Mistry’s family holds about 18% of closely-held Tata Sons
Former Tata Sons Ltd. Chairman Cyrus Mistry was ousted from the board, bringing a formal end to the corporate side of a governance battle within India’s largest conglomerate.
A group of charitable trusts that are the largest shareholders of Tata Sons called an extraordinary general meeting to oust Mistry from the board, where he remained after being axed as chairman of the group. The trusts were expected to succeed because they own about 66 percent of the shares. Mistry, whose family owns about 18 percent of the closely held company, has so far failed in attempts to win legal intervention against his removal.
“The shareholders of Tata Sons Limited, at the extraordinary general meeting held today, passed, with the requisite majority,” a resolution to remove Mistry as a director, the Mumbai-based company said in a statement on Monday.
The bitter, public fight between scion Ratan Tata and Mistry -- who continues to battle his ouster in court -- has roiled the group for months and divided the nation’s business elite, many of whom sit on the boards of Tata companies.
In an e-mail to directors after his dismissal, Mistry said the group may face 1.18 trillion rupees ($17.6 billion) in writedowns over time because of five unprofitable businesses. He cited Indian Hotels Co., Tata Motors Ltd.’s passenger-vehicle operations, Tata Steel Ltd.’s European business, and the group’s power and telecommunications units as "legacy hotspots," according to the e-mail.
Mistry was replaced by Tata Consultancy Services Ltd. Chief Executive Officer Natarajan Chandrasekaran, who will take over this month.