Amit Chandra, Nitin Nohria Lead 60 Minute Play That Brought The Curtains Down On Mistry
The minutes of the Tata Sons October 24 board meeting read like a Shakespearean drama and by the way Ishaat Hussain did vote against Cyrus Mistry.
It was a cast of 11 that afternoon at 2 p.m. at Bombay House, except that one of them had no idea how the drama was going to end.
The minutes of the Tata Sons board meeting on October 24 read like a Shakespearean drama, replete with courtesies and farce and a heroine even.
Present
Ratan Tata, Chairman Emeritus
Cyrus Mistry, Executive Chairman
Ishaat Hussain, Finance Director
Vijay Singh, Trusts Director
Amit Chandra, Trusts Director
Nitin Nohria, Trusts Director
Venu Srinivasan, Trusts Director
Ronen Sen, Independent Director
Farida Khambata, Independent Director
Ajay Piramal, Independent Director
FN Subedar, Company Secretary
Act 1: The Motion Asking Mistry To Step Down
At the start of the meeting Cyrus Mistry, then executive chairman, Tata Sons, was informed that Chairman Emeritus Ratan Tata will be joining the board members. Next to speak was Nitin Nohria, dean of Harvard Business School and a Tata Trusts nominee director on the board of Tata Sons.
Nohria: Tata Trusts has asked its nominees on the board of Tata Sons to bring a motion to the Board of Tata Sons.
Joining cause with him was Amit Chandra, managing director of Bain Capital and also a Tata Trusts nominee director on the board of Tata Sons. Incidentally Nohria and Chandra are brothers-in-law.
Chandra: At a meeting of the Trust Directors held earlier in the day it was agreed to move a motion to request Cyrus Mistry to step down from the position of executive chairman of Tata Sons as the Trusts had lost confidence in him for a variety of reasons.
Chandra added that Tata had just met Mistry and had requested him to step down.
Chandra: Requests Mistry to reconsider decision not to step-down before the board gets into a formal process in this regard.
Mistry: Requests Tata to say a few words.
Tata: Says he’s an observer at this stage.
Chandra sought the views of Mistry on the motion. Mistry said 15 days’ notice is required for taking up such an item for consideration of the Board and stated that the present action was illegal.
Chandra: The Trusts have obtained legal advice stating that such a notice is not necessary.
Mistry: Says he would also like to obtain legal advice
Mistry added that the legal opinions were not made available to him and that he did not agree with them.
Since Mistry was an interested party in the motion Chandra requested Vijay Singh to act as the Chairman.
Finance Director Ishaat Hussain and Independent Director Farida Khambata said they would like to abstain from voting on the proposal, all other directors supported the motion. And thus a motion was passed asking Cyrus Mistry to step down as executive chairman of Tata Sons.
Act 2: The 9 Resolutions
Thereafter, on a proposal by Amit Chandra and seconded by Venu Srinivasan, Vijay Singh was appointed chairman of the meeting and new items included on the agenda.
There were seven items in all and in each of the seven resolutions Farida Khambata abstained from voting and Cyrus Mistry recorded his objection saying it was not legal for the resolution to be taken up. But because all the other seven directors, including Ishaat Hussain, voted in favour of the resolutions, they all passed.
The Final Act
Despite having just scripted his sacking, Tata, after the resolutions were passed, mentioned the need to recognise Mistry’s contribution over the last 4 years and said it was important for the Group to move forward. He asked Mistry if he would like to continue as Non-Executive Director of Tata Sons, Mistry said he would.
Hussain asked Mistry about continuing in the role of chairman of other Tata Group companies, since if not, the matter had to be reported to the stock exchanges. Mistry said he would decide on this and revert.
Mistry: Asked for copies of the legal opinions.
Chandra: Said he was not carrying the legal opinions.
Mistry: Wondered how the rest of the Board could act without these opinions being made available to them.
Mistry asked for the opinions to be provided that day and it was agreed that they would be shared with him after checking with lawyers.
On Tata’s prompting the Board decided to issue a press announcement after the meeting.
Curiously, despite the significance of what had just happened, the board went on to consider another business matter – Hussain brought up a proposal for Tata AIA Life Insurance to acquire a stake in PNB Metlife. And the list of PNB Metlife shareholders included M. Pallonji and Company Pvt. Ltd, owned by Mehli Mistry, the other Mistry in this saga. It was decided that Tata AIA would submit a bid.
At 3 pm the meeting came to an end with the customary thanks to the Chairman. Vijay Singh not Cyrus Mistry remember.
BloombergQuint accessed the minutes of meeting along with other documents attached to the petition filed by Cyrus Mistry’s family in the National Company Law Tribunal.
