Setback to Ratan Tata: Taj Group backs Mistry’s lead
In a statement to stock exchanges, IHCL's independent directors said that 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".
In what could be a blow to Ratan Tata, all six independent directors of the Tata Group's prestigious Indian Hotel’s Company (IHCL), popular as Taj Group, on Friday openly supported former Tata Sons’ chairman Cyrus Mistry's leadership ahead of a scheduled board meet.
Nadir Godrej, Deepak Parekh, Keki Dadiseth, Ireena Vittal, Gautam Banerjee and Vibha Paul Rishi met at the group's headquarters, Bombay House, and were unanimous in their praise for steps taken by Mistry in providing strategic direction and leadership to the company. The Taj Group has 10 members, including Mistry and his elder brother Shapoor.
The independent directors also said that their decision was being made public because IHCL is a listed entity and it was essential for them to let the company's investors and public at large know of their views so that they could take an informed decision on its stock.
Tata Chemicals will be the next company from the group which will hold its board meeting on November 10, followed by Tata Steel on November 11.
JN Gupta, a former executive director of markets regulator Sebi, said that the move by IHCL's independent directors may get replicated in other Tata companies too. "Going forward, the battle will be tough for both Tata and Mistry camps and the stance taken by big financial institutions will be crucial," Gupta told TOI.
If Tata Sons wants to remove Mistry from IHCL, it will have to call an extraordinary meeting of IHCL's shareholders to vote on Mistry's ouster. However, during the voting, Tata Sons and other promoter-shareholders will not be allowed to vote on the resolution. A spokesperson of Tata Sons declined to comment on future possibilities.