One of the main reasons that resulted the removal of Cyrus Mistry as chairman is his failure to keep Tata Sons’ board informed about Tata Power’s take over of Welspun Renewables Energy in last month.
One of the main reasons that resulted the removal of Cyrus Mistry as chairman is his failure to keep Tata Sons’ board informed about Tata Power’s take over of Welspun Renewables Energy in last month. Rata Tata, who is back as group’s chairman ,had raised concerns last month over the non-communication of the Rs 9,300-crore acquisition of Welspun Renewables Energy, the CNBC-TV18 has quoted sources privy to the development has said. They also added that members of Tata Sons board first heard of the acquisition through reports in the media.
Apart from this, Tata felt that the Welspun deal should have been discussed with the company and added that Mistry didn’t even ask for Tata Sons board approval for the deal. Tata Power had revealed the plan to acquire Welspun Renewables Energu in June and bought the company in September for Rs 9,300 crore. Ratan Tata had termed non-communication of the agreement a ‘breach’ of undertaking by Tata Sons with Tata Trusts, the report further said. It was pointed out that Tata Trusts couldn’t evaluate if Welspun deal was in best interest of shareholders. Cyrus Mistry had reportedly told Tata that the non-communication was in accordance with insider trading norms.
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In a sudden step, he was sacked on Monday as the chairman of Conglomerate, after which he had mailed a letter to the directors, which he said he was “shocked beyond words” at suddent removal and also that he was made “lame duck” director. Among his other charges he also said that production of Tata Nano was only going on because of emotional reason even though it had become loss making entity. The Tata group in its reply said that it was beneath the dignity of the company to engage in a public spat with regard to the several allegations by the former chairman.