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.
Sebi steps up scrutiny as Tata-Mistry feud escalates
Markets regulator Sebi has stepped up scrutiny on developments in the escalating Tata- Mistry feud, keeping a close vigil on all disclosures being made as also the finer details of the board meetings of listed firms of the Tata group.
The watchdog is seeking to prevent violation of corporate governance norms and protect investors’ interest, for which it has also received communications from various stakeholders, including foreign institutional investors.
In the wake of boardroom battles at various Tata group companies, Sebi is keeping a close watch on the role of independent as well as non-executive directors, expecting them to work as guardians of minority shareholders.
Seeking ouster of Cyrus Mistry as director of these firms, Tata Sons has sought extraordinary general meetings (EGMs) of shareholders.
More than two dozen companies of the over USD 100 billion Tata group are listed and Sebi is focusing on protecting the interest of minority shareholders and ensuring that corporate governance norms are followed.
Since the ouster of Mistry as Chairman of Tata Sons -- the holding entity of most Tata group companies -- on October 24, there have been a lot allegations traded between the two sides even as Mistry continues to be chair the board of several firms.
Sources said Securities and Exchange Board of India (Sebi) has “stepped up scrutiny” of the developments related to the Tata-Mistry battle.
Apart from checking out the finer details of various board meetings of listed group firms, especially after Mistry’s ouster, Sebi is also looking into representations and information provided by various stakeholders, sources added.