After all six independent directors of IHCL (known as Taj Hotels) backed Mistry’s continuation as Indian Hotels Company Ltd (IHCL) chairman last Friday, the Tatas are likely to question whether some independent directors of IHCL acted in a “truly independent” manner and if all of them would come out clean on not receiving financial or pecuniary benefits from the Shapoorji Pallonji (SP) Group, according to a TOI report.
In a statement to the stock exchanges, they expressed “full confidence” in Mistry and said it was essential to let IHCL investors and the public at large know of their views so that they could take an “informed decision” on its stock. This was widely described as a setback for Ratan Tata and the Tata Sons board. A senior member of the Tata Trusts is expected to rebut the statement of the six independent directors of IHCL and ask if they may have jeopardised its future by going against the decision to sack Mistry.
“While praising performance under Mistry, we wonder if they asked themselves what would happen if the Tatas withdrew all the guarantees executed in favour of IHCL. Will it be the same if IHCL were to become a Mistry group company?” told a Bombay House insider to TOI. The SP Group which is controlled by Mistry’s family holds an 18.5% stake in Tata Sons, which in turn holds substantial stakes in all Tata group companies. Support for Mistry from the six independent IHCL directors-—Nadir Godrej, Deepak Parekh, Keki Dadiseth, Ireena Vittal, Gautam Banerjee and Vibha Paul Rishi—has been widely described as a setback for Ratan Tata and the Tata Sons board, which ousted him as chairman. Mistry, son of SP Group patriarch Pallonji Mistry, has refused to quit boards of various group companies and is banking on their independent directors in his battle against Tata Sons.