TCS board in unanimous agreement that Mistry removal in best interest of the group. As a follow up TCS EGM begins, Ishaat Hussain kick-starts meet. TCS director Aman Mehta said that all the board members expect Mistry were in support of his removal. Although, when the board invited the shareholders to ask any questions regarding the ouster of Mistry, they demanded elaborate reasons as to why Mistry was being sacked. One of the shareholders even asked of Ratan Tata only wanted ‘yes men’ around him. The 7th shareholder asked if it was fair for independent directors to remove the company’s director. Meanwhile, Cyrus Mistry was reported missing from the meeting.
Earlier, shareholders of one of Tata Group’s pivotal assets Tata Consultancy Services (TCS) voted on a resolution to remove Cyrus Mistry as the company’s director. Both Ratan Tata and Mistry have been trading charges charges over the recent weeks even as boards of numerous group companies have set in motion processes to remove Mistry from his post. Ahead of today’s meeting, shareholders have already been approached by both the groups and been asked to vote keeping the long-term well-being of the group in mind. TCS powers a major portion of the $100 billion Tata Group’s profits and as such it is the most significant part of the group.
Following the spat between the two, Mistry, was ejected from the position of director and chairman of Tata Industries on Monday following shareholders’ vote. This was for the first time that an executive has been ousted from company’s board since his removal as Tata Group chairman in October.
For other assets of the group including Indian Hotels (EGM on December 20), Tata Steel (December 21), Tata Motors (December 22), Tata Chemicals (December 23), and Tata Power (December 26), shareholders will take a final call as per the days indicated.
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Though Mistry was ousted as chairman of Tata Sons in October, he still remains on the board of some group assets and has not quit from the position. In fact he has urged the shareholders in a letter asking them not to accept the proposal to remove hum from the boards.
Ishaat Hussain was appointed as the new Chairman of of TCS post Mistry’s removal and Tata Sons now seeks to pass a shareholder resolution for the removal of Mistry as the director on board for TCS. According to reports, it is being hinted that it will be very difficult for Mistry to retain his post.
On his sacking, the group said that Mistry was removed as chairman because the board of Tata Sons had lost confidence in him and his ability to head the group. The group said that with all the concentrated power and authority Mistry had as chairman in all major Tata operating companies he tried to weaken management structures ‘acting contrary to his fiduciary duties.’