Setback for Cyrus Mistry: No unanimous support from Tata Motors' independent directors
In a setback to Cyrus Mistry, independent directors of Tata Motors on Monday did not offer unanimous support to his leadership and instead backed all decisions taken by the company, including on small car Nano, which have been criticised by the ousted chairman of Tata Sons.
Mumbai: In a setback to Cyrus Mistry, independent directors of Tata Motors on Monday did not offer unanimous support to his leadership and instead backed all decisions taken by the company, including on small car Nano, which have been criticised by the ousted chairman of Tata Sons.
Unlike the backing he got from independent directors of Indian Hotels Company (IHCL) and Tata Chemicals, the words of unanimous backing to Mistry's leadership during the crucial board meeting of Tata Motors were absent from the statement that the automaker issued after the meeting that lasted over five hours.
The board meeting of Tata Motors assumed significance against the backdrop of escalating feud between Tatas and Mistry as well as Tata Sons' decision to seek ouster of Mistry from key group companies.
Mistry continues to be chairman of several listed companies of Tata Group even after he was removed as chairman of the holding company, Tata Sons. These companies include Tata Motors, Tata Chemicals and IHCL.
In a statement, the country's top automaker said: "The independent directors of Tata Motors met today to consider and review the impact and significance of recent events and media reports relating to the governance, management and business of the company."
The independent directors have confirmed that all decisions taken by the board with regard to the strategy, operations and business of the company have been unanimous and executed by the chairman and the management accordingly, it added.
"The independent directors have further affirmed that the company continues to be governed, supervised and managed under the guidance and direction of the board.
"The management of the company and its subsidiaries have the full confidence and support the independent directors," the statement said.
The statement issued by Tata Motors was in contrast to the ones issued by IHCL and Tata Chemicals which stated that independent directors had supported Mistry unanimously.
Sources said one of the independent directors came with a resolution backing Mistry but after the deliberations the resolution was not carried.
Other independent directors did not approve it suggesting big differences in the board over the support to Mistry.
On November 5, seven independent directors of Indian
Hotels Company (IHCL) had strongly backed Mistry. Tata Chemicals independent directors had also came out in support of Mistry.
Tata Motors has eleven board members, including six independent directors -- Wadia group chief Nusli N Wadia, ex-CSIR Director General Raghunath A Mashelkar, Credit Bank (DCB) Chairman Nasser Munjee, former Eicher Group Chairman Subodh Bhargava, former bureaucrat Vinesh K Jairath and Kotak Investment Bank Managing Director and CEO Falguni S Nayar.
Last week, taking Mistry head on, Tata Sons sought his removal as well as that of the group's friend-turned-foe Nusli N Wadia from the board of three prime listed Tata group companies -- Tata Motors, Tata Chemicals and Tata Steel.
Tata Sons, which holds 26.51 per cent stake in Tata Motors, has asked the manufacturer of Jaguar Land Rover to convene an extra-ordinary general meeting of the company to consider its resolution seeking removal of Mistry and Wadia.
The latest moves are seen as attempts by Ratan Tata, who was brought in as interim head after sudden removal of Mistry, to seize back control of India's largest conglomerate.