Mumbai: Cyrus Mistry on Thursday skipped two crucial board meetings, of Tata Sons and Tata Consultancy Services (TCS), his first such absence since he was ousted as chairman from both companies.
The board of directors of Tata Sons did not discuss issues linked to Mistry, Tata executives said. However, at the TCS meeting, which was chaired by Ishaat Hussain, it was decided that the company will convene an extraordinary meeting (EGM) on December 13 to remove Mistry as a director from its board. On November 10, Tata Sons had said Hussain will replace Mistry as TCS chairman.
TCS is the first company from the Tata Group to fix the EGM date. In the next few weeks, boards of Tata Steel, Tata Motors, Indian Hotels and Tata Chemicals will also consider convening similar EGMs. Despite opposition from parent company Tata Sons, Mistry remains chairman in these four group firms. To remove Mistry from boards of listed Tata companies, a majority of shareholders have to agree. In Tata Motors, Indian Hotels and Tata Chemicals, independent directors have supported Mistry’s continuance as chairman while in Tata Steel, the six independent directors were divided for and against him. It remains to be seen how shareholders factor in the views of these directors.
Mistry’s dismissal as Tata Sons chairman and attempts to remove him from other group companies has raised questions about governance practices at the Tata Group.
“It’s (the TCS EGM) the most regrettable step by the Tatas and murder of corporate governance as till date they have not spelt out why Cyrus was replaced as chairman,” said Anil Singhvi, chairman, ICan Advisors. Singhvi wondered how directors who had come on board recently and were yet to acquaint themselves with the group’s businesses, had agreed to go along with the decision to replace Mistry. Singhvi’s reference was to Venu Srinivasan, Ajay Piramal and Amit Chandra who had joined Tata Sons months before Mistry’s removal.
Barring Mistry, Thursday’s board meeting, which was Hussain’s first as chairman of TCS, was attended by all the directors with Ron Sommer and Clayton Christensen joining in via videoconference.
After the TCS board meeting, Hussain and the company’s MD & CEO N Chandrasekaran attended the Tata Sons board meet chaired by Ratan Tata that lasted for nearly two hours. This was Chandrasekaran’s first board meet as a Tata Sons director. Source: TOI