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Tata Sons Wants Not Just Mistry, But Also Nusli Wadia To Be Shown The Door

The list of Tata group companies convening extra-ordinary general meetings gets longer



(Source: BloombergQuint)
(Source: BloombergQuint)

Tata Sons Ltd. has moved resolutions to remove Cyrus Mistry and Nusli Wadia as directors of Tata Steel Ltd., Tata Chemicals Ltd. and Tata Motors Ltd., as the boardroom battle following Mistry’s ouster as chairman of the group turns more bitter.

Tata Sons, the principal shareholder of all three companies, sent separate notices asking them to to convene EGMs to remove Cyrus Mistry as chairman as well as Nusli Wadia as director. Wadia is an independent director on the board of all three companies, all three companies said in separate stock exchange filings.

The development followed Tata Chemicals’ board meeting on Thursday in which independent directors, including Nusli Wadia, expressed their “full confidence” in Cyrus Mistry as chairman of the company. Tata Chemicals thereby became the second Tata group company to back Mistry, after Indian Hotels.

On Friday, however, Tata Chemicals’ non-executive, non-independent director Bhaskar Bhat resigned from the board with effect from November 10, saying that board ignored several important issues of ‘discomfort’ raised by him. Bhat said this in his resignation letter addressed to Mistry.

Tata Sons Wants Not Just Mistry, But Also Nusli Wadia To Be Shown The Door

Two other Tata Group companies, Tata Consultancy Services Ltd. (TCS) and Indian Hotels Company Ltd. had earlier been sent notices to convene EGMs to remove Mistry as chairman of Indian Hotels and director of TCS.

Tata Sons earlier removed Cyrus Mistry as the chairman of TCS and nominated Ishaat Hussain to replace him in the interim. In a filing to the stock exchanges on Thursday, the IT giant argued that the principal shareholder (Tata Sons) has the right to nominate the chairman of the board of the directors.

Article 90 of the Articles of Association (AOA) of the company empowers Tata Sons Ltd. (Tata Sons) to nominate the Chairman of the Board of Directors, so long as Tata Sons along with its associates holds at least 26 percent of the paid up equity share capital of the Company
TCS Stock Exchange Filing
Tata Sons Wants Not Just Mistry, But Also Nusli Wadia To Be Shown The Door

In the days following Mistry’s ouster from Tata Sons, the two sides have traded bitter accusations. On Thursday, Tata Sons in a nine-page letter accused Mistry of betraying the trust it reposed in him when it appointed him chairman in 2012. Mistry said the Tata group's accusations were part of a smear campaign not worth responding to.