Mumbai: Ahead of EGMs of six Tata group firms called to remove Cyrus Mistry as director, Tata Sons interim Chairman Ratan Tata on Wednesday told shareholders that the continued presence of the ousted executive in respective boards is a serious “disruptive influence” and can make the companies “dysfunctional“.
In a letter to the shareholders seeking their support to the special resolution moved by Tata Sons to remove Mistry as director, Tata said Mistry was removed as the Chairman as Tata Sons board lost confidence in him and his ability to lead the conglomerate.
He also said the “deliberated action” to remove Mistry by the Tata Sons board was taken after the relationship with him steadily deteriorated and “several attempts to remediate went unheeded”.
Tata said Mistry was appointed as a director of various Tata group companies only as a corollary to his being the Chairman of Tata Sons.
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“The right step would have been for him to resign as director. Unfortunately, he has not yet done so and his continued presence as a director is a serious disruptive influence on these company boards, which can make the company dysfunctional, particularly given his open hostility towards the primary promoter, Tata Sons,” Tata wrote.
He further said Mistry was offered an opportunity to step down voluntarily from the Chairman position, which he rejected.
Justifying the move to sack Mistry, Tata said: “the Board of Tata Sons lost confidence in him and in his ability to lead the Tata group in the future.”
This deliberated action by the Tata Sons board was taken after several attempts to remediate went unheeded.
“As a final step he was offered an opportunity to step down voluntarily from the Chairman position, which he rejected and said that it should be taken up at the Board,” Tata said, adding this was done and Mistry was replaced.
Following special resolution moved by Tata Sons to remove Mistry as director, TCS has called an EGM on December 13, Indian Hotels Co Ltd on December 20, Tata Steel on December 21, Tata Motors on December 22, Tata Chemicals on December 23 and Tata Power on December 26.
There were no immediate comments from the Mistry camp.
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