Tata Sons has stooped to a new low: Mistry
Maintaining that good corporate governance balances promoters interests with minority shareholders rights, the office of Cyrus P Mistry, the ousted Chairman, has questioned the motive of Tata Sons, the holding company of the Tata Group, in questioning independent directors for carrying out their fiduciary duty. 
 
"To question the independence of the directors by Tata Sons is truly unfortunate given that the country acknowledges them as stalwarts of India Inc. To suggest that 'ulterior objectives' and 'clever strategy' can sway these eminent names in undertaking their fiduciary duties and in discharging the duties mandated by statute as independent directors is absolutely astonishing and really speaks to how low Tata Sons has unfortunately stooped in their public statements," the office of Mr Mistry said in a statement.
 
In a late evening statement issued on Sunday, Tata Sons stated that it will do all it takes to initiate similar action wherever required and deal with the situation. "In the light of the developments since 4th November, Tata Sons reiterates that it is crucially important for boards, including independent directors, to consider that their views and positions ensure that the future of Tata companies is protected, taking into consideration the interest of all stakeholders," the Tata Group holding company said.
 
So far, after the removal of Mr Mistry as chairman, Tata Sons has issued notices for shareholders' meeting in at least five companies -- Indian Hotels, Tata Steel, Tata Motors, Tata Chemicals and Tata Consultancy services -- seeking his removal from their boards.
 
The office of Mr Mistry also provided list of independent directors of Tata Chemicals and Indian Hotel Co Ltd, who are being questioned by Tata Sons for 'undertaking their fiduciary duty of protecting shareholders of the companies of which they serve'. The names include, Deepak Parekh, Gautam Banerjee, Ireena Vital, Keki Dadiseth, Nadir Godrej, Naseer Munjee, Nusli Wadia, Vibha Paul Rishi and YSP Thorat. 
 
"It is imperative to highlight that out of the above list of nine independent directors, six were appointed during Ratan Tata’s tenure. Two of these directors also serve as Trustees on Tata Trusts. In both IHCL and Tata Chemicals – the independent directors were unanimous in their support to Cyrus Mistry as the Chairman. The Independent Directors on the Tata Chemicals board, in their statement, 'also reaffirmed that all the decisions taken with regard to the operations and business of the Company had been taken by the board unanimously and executed by the Chairman and management as per directions of the board'. The endorsement is a reflection of Mistry’s conduct as Chairman in upholding the highest standards of corporate governance and in taking the board along in all decisions that impact the company," the statement issued by Mr Mistry's office says.
 
Talking about corporate governance in the Tata Group, Mr Mistry says, after becoming Chairman of Tata Sons, he understood that the Group needed a strong corporate governance framework that balanced interest of the promoter with minority shareholders’ rights. In addition, between Tata Trusts, Tata Sons, and the Tata operating companies, there was a need to be compliant with the law relating to insider trading by ensuring communication of unpublished price sensitive information strictly on a need to know basis, he added.
 
The statement says, "The corporate governance framework that was developed under Mistry’s leadership attempted to ensure that group companies would adhere to the group values, share best practices, enable movement of talent, exploit win-win synergies, and do all of this without impinging on the independence of the operating companies and the boards that they are ultimately responsible to. By placing the responsibility where it should lie, with the board of directors of the operating companies, allowed the independent directors to ensure that the interests of minority shareholders were aligned with the operating company’s strategy as well as the overall direction of the Tata Group."
 
Mr Mistry also refuted the allegations made by Tata Sons on 'drifting away' of the group's operating companies. "Prior to Mistry’s Chairmanship, all the Board members of Tata Sons, with exception of him, were internal to the group, being either Vice Chairmen of group companies or members of GCC. Today, the structure is exactly the opposite. The requirement to have 30% Trust nominees and 30% independent directors meant that in addition to Mr Ishaat Hussain and Mr Mistry, there was possibly only one more senior group centre member who could be on the Board of Tata Sons. This limited the involvement of other group centre members on the Tata Sons board. Moreover, in the past three years, all these internal members, with the exception of Ishaat Husain have retired. This was a generational change."
 
"As agreed with the Tata Sons board, the governance mechanism to protect Tata Sons interests and ensure adequate group representation on operating company boards, was to have GEC members, other senior group centre members (e.g. Farokh Subedar, S Padmanabhan), and select CEOs (e.g., Bhaskar Bhat, Noel Tata) on the boards of operating companies." 
 
"The corporate governance framework in India has considerably tightened in recent times with more stringent rules with respect to independence of directors, female directors, board evaluation, and so on. To meet this increased scrutiny, several new policies and frameworks were developed at the group centre and deployed across operating companies including refreshing the code of conduct, developing a board effectiveness framework, LEAD program to enhance gender diversity, and provide TBEM feedback on company to the board," the statement issued by Mr Mistry's office concludes.
Like this story? Get our top stories by email.

User

COMMENTS

prakash bhende

2 years ago

Mr. Cyrus Mistry. The lowest grade chairman in the history of Tatas without knowledge and experience to handle any business. I had been working with him for almost more than 2 years when he was appointed as a Chairman. During my past 28 years of experience with Tata Motors and even before Mr. Ratan Tata was appointed a chairman of Tata Sons ,I found that Cyrus and his Father Mr. Shapoorjee Palonjee were doing all the construction work for Tata Companies at a cost which was almost 2.5 times to 3 times the cost. It was only when I became Incharge, I took decision not to allow M/s Shapoorjee Palonjee, any construction work at Pune Plant. Cyrus Misty's personal firm( with Turnover less than 3000 Crore) was stopped to undertake further construction work. I need not tell Why Mr. Carl Slym who was about to get 14 years of Rigorous Imprisonment was appointed as a M.D. of Tata Motors and how he was allowed to run away from India just like Mr. Anderson of Union Carbide( Bhopal Tragedy ). I can quote many facts about M/s Shapoorjee Palonjee , Cyrus Mistry's own company, was looting M/s Tata firms for generations and how Cyrus's father was constantly pressuring Tatas for making him ( and his uneducated elder brother in the last 15 years ) Chairman of the Different Tata companies. I need not name other senior posts filled during the tenure of Cyrus Mistry, one of which Mr. R. Venkatraman who also ran away after or just before M. D. Carl Slym ran away from Tata Motors. Cyrus's hobby and a love for horses rather than his love for handling his corporate duties is not known to many fools who are trying to see Young corporate entity in Mr. Cyrus who never talked even for 15 minutes with his subordinates so as to motivate them. Making Cyrus, Chairman of Tata Empire having more than Rs. eight lakh Crore was the biggest mistake committed 4 years ago. Now every one in the empire, has understood the incapability, which is already built in, stands exposed. Had it been recognised 4 years ago the picture of Tata Companies would have been entirely different.
Ratan Tata has done a great job to correct himself so as to weed out the dirt gathered in the Tata Empire by taking suitable action on him, who by no standards was fit to become even a senior Manager in Tata Company.

Suketu Shah

2 years ago

Cyrus is 48.Rotten 79.What a shame Rotten is targeting worldwide a person almost half his age.

Tata Motors, Tata Steel get notices for removal of Mistry, Wadia
Tata Motors and Tata Steel on Friday informed the stock exchanges that they have received notices from Tata Sons for the removal of Chairman Cyrus Mistry and Independent Director Nusli Wadia from the boards of the two companies.
 
In one separate regulatory filing, the voting right of Tata Sons in Tata Motors was mentioned as 26.51 per cent, but in the other, no figure was given for Tata Steel. The notices seek an extra-ordinary meeting of shareholders for the ouster.
 
Based on responses, if any, from the duo after they are furnished copies of the notices, the two companies may have to call such a meeting of shareholders for their removal, if they don't quit on their own.
 
On Thursday, Tata Consultancy Services (TCS) had also issued a special notice under Section 169 (read with Section 115) of the Companies Act, 2013, and made a requisition for an extraordinary general meeting of shareholders to consider Mistry's removal as a director of TCS.
 
TCS replaced Mistry as its Chairman and appointed Ishaat Hussain as the new Chairman of the board of directors of the company with immediate effect.
 
Tata Sons, the holding company of the Tata Group companies, removed Mistry, 48, as its chairman last month saying that he had lost the confidence of the board due to several factors and that the trustees were increasingly concerned with the growing trust deficit.
 
Tata Sons on Thursday said the ousted Chairman should resign from all group companies and deplored the manner in which Mistry has sought the support of independent directors of Indian Hotels to continue as its Chairman.
 
"Mistry conveniently forgets that he was appointed as the Chairman of the Tata operating companies by virtue of and following his position as the Chairman of Tata Sons," Tata Sons said in a nine-page statement issued on Thursday.
 
However, following Tata Sons' statement, the independent directors of Tata Chemicals on Thursday had reposed their faith in Chairman Mistry, while taking up the second quarter results for the current financial year.
 
Disclaimer: Information, facts or opinions expressed in this news article are presented as sourced from IANS and do not reflect views of Moneylife and hence Moneylife is not responsible or liable for the same. As a source and news provider, IANS is responsible for accuracy, completeness, suitability and validity of any information in this article.
 

 

User

SBI's deposits zoom by Rs 53,000 cr in two days, Q2 net falls
As much as Rs53,000 crore were deposited with the State Bank of India (SBI) during the last two days after the government's demonetisation move, bank Chairperson Arundhati Bhattacharya said on Friday.
 
She said the bank received Rs31,000 crore on Thursday and Rs22,000 on Friday. 
 
According to her, the SBI also exchanged currencies valued around Rs1,500 crore.
 
On Tuesday, the Centre announced Rs 500 and Rs 1,000 notes ceased to be legal tenders from November 8 midnight.
 
"The cash is drying up. But we are taking care of it. There is no need to panic. We still have 50 days in hand. Nothing is going out of fashion. Till that time, please publicise the use of debit cards," she told reporters here while announcing the bank's second quarter results.
 
The SBI said it closed the second quarter of the current fiscal with a lower net profit of Rs 2,538.32 crore.
 
The bank said it has posted a net profit of Rs 2,538.32 crore for the quarter ended September 30, down from Rs 3,879.07 crore for the quarter ended September 30, 2015.
 
The bank's total income for the period under review increased to Rs 50,742.99 crore compared with Rs 46,854.81 crore for the quarter ended September 30, 2015.
 
The bank's unamortised loss on account of selling its assets to Asset Reconstruction Companies as on September 30, 2016, stands at Rs 516 crore.
 
The bank's Board of Directors also approved issuance of maximum 13,63,65,146 equity shares of face value of one rupee each, to the shareholders of State Bank of Bikaner and Jaipur (SBBJ), State Bank of Mysore (SBM), State Bank of Travancore (SBT) and the government of India (GoI) for its shareholding in Bharatiya Mahila Bank Limited (BMBL) as on the record date at the agreed swap ratio as under:
 
a) For minority shareholders of SBBJ -- 28 equity shares of SBI of the face value of Re 1 each to be issued in lieu of 10 equity shares of SBBJ of the face value of Rs 10 each.
 
b) For minority shareholders of SBM -- 22 equity shares of SBI of the face value of Re 1 each to be issued in lieu of 10 equity shares of SBM of the face value of Rs 10 each.
 
c) For minority shareholders of SBT -- 22 equity shares of SBI of the face value of Re 1 each to be issued in lieu of 10 equity shares of SBT of the face value of Rs 10 each.
 
d) 4,42,31,510 Equity shares of SBI of the face value of Re1 to be issued to the Government of India in lieu of their shareholding in BMBL (i.e. 100 crore shares of the face value of Rs10 each).
 
As a result the issued capital of the SBI will go up from Rs776,35,98,072 to Rs789,99,63,218 (maximum), subject to approval of the schemes of acquisition of SBBJ, SBM, SBT and BMBL by the government of India.
 
Disclaimer: Information, facts or opinions expressed in this news article are presented as sourced from IANS and do not reflect views of Moneylife and hence Moneylife is not responsible or liable for the same. As a source and news provider, IANS is responsible for accuracy, completeness, suitability and validity of any information in this article.

User

We are listening!

Solve the equation and enter in the Captcha field.
  Loading...
Close

To continue


Please
Sign Up or Sign In
with

Email
Close

To continue


Please
Sign Up or Sign In
with

Email

BUY NOW

online financial advisory
Pathbreakers
Pathbreakers 1 & Pathbreakers 2 contain deep insights, unknown facts and captivating events in the life of 51 top achievers, in their own words.
online financia advisory
The Scam
24 Year Of The Scam: The Perennial Bestseller, reads like a Thriller!
Moneylife Online Magazine
Fiercely independent and pro-consumer information on personal finance
financial magazines online
Stockletters in 3 Flavours
Outstanding research that beats mutual funds year after year
financial magazines in india
MAS: Complete Online Financial Advisory
(Includes Moneylife Online Magazine)