The 45 Minute Storm: What Happened At The Tata Sons Board Meeting?
Insiders recount what happened at the October 24 Tata Sons board meeting.
In classic Kurosawa style, the events of the headline grabbing Tata Sons board meeting of October 24 have several narratives. What’s clear is that Cyrus Mistry did not expect to be sacked that fateful afternoon.
One version of events suggests that it was a 30 – 45 minute long board meeting. A few minutes before the meeting officially started the subject of his under-performance was brought up. The matter was not listed on the agenda, such matters rarely ever are. Imagine a board agenda that says: Item No. 1 – Dismiss the Chairman.
Well, to continue with the first account – the rest of the meeting remained focused on Mistry’s dismissal, enough directors (6 of 8) voted in favour of replacing him and then voted on appointing Ratan Tata as interim chairman and appointing a selection committee to look for the next chairman.
Why didn’t Mistry block the discussion, ask for time to present his defense and adjourn the meeting to a later day? The law empowers him to do so. But he didn’t.
Read: Does The Law Allow For A Boardroom Coup?
As the narrator said to me “he couldn’t gag six people”. It seems Mistry did make the point that the proceedings were illegal, an assertion he later also made in his letter dated October 25 to the board and trustees of Tata Sons. But the discussions continued.
Another version of events, offers some more detail. It suggests that several board members came armed with a brief. And the brief listed three resolutions to be passed:
- The chairman should be dismissed for under-performance
- They should ratify the relaxation of the retirement age limit for a Tata Sons chairman (Ratan Tata is 78)
- A selection committee was to be appointed to select the next chairman, including the names of individuals to be appointed to the committee.
A third version of events focuses less on what happened that Friday afternoon and instead tells the story of how the relationship between Ratan Tata and Cyrus Mistry had deteriorated substantially over the past 12-16 months. That efforts were made to apprise him of the board’s loss of confidence in him and he was given an opportunity to step down. But he refused, prompting a showdown. And then Monday happened.
Read: Five Amendments That Made Cyrus Mistry A ‘Lame Duck Chairman’
Based on these accounts it is possible to surmise that Mistry probably knew that Tata wanted him out but didn’t quite expect to be sacked. That several board members, independent and nominees of the Tata Trusts, had confabulated in advance and arrived at the next steps. And that the meeting, for the better part, worked to a script.
Tata Sons spokesperson told BloombergQuint on the phone that the "The process that was followed at the board meeting was absolutely correct". Cyrus Mistry was not available for comment.
(These accounts were drawn from conversations with people close to the events.)
