The independent directors of Tata Group company Indian Hotels have expressed their full faith in Cyrus Mistry, the recently ousted chairman of Tata Sons, the company said in a filing to the Bombay Stock Exchange.
The vote of confidence comes against the backdrop of the ongoing battle between Ratan Tata and Cyrus Mistry, after the latter was abruptly replaced as the chairman of Tata Sons on October 24. He continues to be the chairman of Tata Group companies like Indian Hotels.
Taking into account board assessments and performance evaluations carried out over the years, the Independent Directors unanimously expressed their full confidence in the Chairman, Cyrus Mistry and praised the steps taken by him in providing strategic direction and leadership to the Company.Indian Hotels’ stock exchange filing
The independent directors were of the view that being a listed company, it was essential for them to air their views to investors and the public at large so they could make an informed decision.
Independent directors on the board of Indian Hotels include Deepakh Parekh, Nadir Godrej, Ireena Vittal, Keki Bomi Dadiseth, Vibhu Paul Rashi and Gautam Banerjee.
Earlier in the day, the board of Indian Hotels met to consider and approve the quarterly earnings for the company. For the second quarter of the current fiscal, Indian Hotels reported a net profit of Rs 27.65 crore compared to a net loss of Rs 7.12 crore in the corresponding quarter last year. Total income increased by 3.1 percent to Rs 524.7 crore.
On a consolidated basis, the group has posted a loss (after taxes, minority interest and share of profit/(loss) of associates / joint ventures) of Rs 26.7 crore compared to a loss of Rs 151.9 crore in the corresponding quarter last year.
Cyrus Mistry had identified Indian Hotels as one of the weak spots within the conglomerate and had highlighted the asset sales undertaken to improve the financials of the group. He also noted that the 2009 acquisition of the Searock property in Mumbai at a “highly inflated price” has impaired the company’s ability to pay dividends, as the company has had to “write down nearly its entire networth over the past three years”.
According to the earnings release issued to stock exchanges, Indian Hotels had a debt-equity ratio of 0.87 times at the end of September 2016 compared to 0.99 times at the end of September 2015. It had an interest coverage ratio of 3.68 times as of September 2016 compared to 1.64 times in September 2015.