In the ongoing feud between Tata chief Ratan Tata and his long-trusted aide Cyrus Mistry, independent directors are suffering the heat, as Tata Motors gave board chairman a tacit nod on Monday.
In a more than six hours meeting of the board of Tata Motors- owner of luxury automaker Jaguar Land Rover- backed Mistry’s and company management’s strategy saying that all decisions taken by the board of Tata Motors on strategy and operations had been “unanimous” and executed by the chairman and the management, Reuters reported.
Even though the board stopped short of an outright endorsement, or picking sides, but Mistry got the tacit nod and saved his chair in the Tata Motors. A source of Reuters informed that an independent director brought forward a resolution seeking to endorse Mistry in a similar manner as two other Tata group company boards Indian Hotels and Tata Chemicals had done earlier this month.
The move was opposed by another independent director, and the final statement was a ‘compromise’, the source said. It also admitted that the outcome comes as a setback for Tata Sons, which has already called a number of special shareholder meetings to oust Mistry entirely from some of its group company boards.
In October, Mistry was ousted as chairman of Tata Sons, and since then a bitter spat has continued between the two; Tata family patriarch Ratan Tata and Cyrus Mistry.
Reportedly, Tata Sons blamed Mistry’s ouster on what it called a “breach of trust” and poor performance. Mistry in turn has faulted Tata Sons for poor governance structures and blamed Ratan Tata for many of the conglomerate’s legacy issues.
Mistry remains chair of several major Tata group companies including Tata Motors and Tata Steel, and interestingly board member of Tata Sons by virtue of his family’s 18.41 percent stake in the holding firm.
Tata Sons is roughly two-thirds controlled by Tata Trusts, a group of philanthropic foundations led by Ratan Tata. The group also removed Mistry as Chairman of Tata Consultancy Services in which it owns 70 per cent of the stake, but is having a tough time to remove him from other minority stakes.
The next company on the target is Tata Global Beverages, who will report results this week, is set to meet on Tuesday. The company co-owns and runs Starbucks coffee stores across India and has Mistry in the Chair.