Tata to oust Mistry from positons unless he quits himself
A week after the removal of Cyrus Mistry, Tata Sons is reportedly taking steps to remove Mistry from his positions in various group companies.
Sources close to Mistry recently revealed that he is not going to resign from his position in the company by himself.
Even a week after he was removed from his position by Tata Sons board of directors, Mistry remains the chairman and non-executive director of Tata Motors Ltd, Tata Power Ltd and Indian Hotels Co. Ltd, among other subsidiaries under the group.
Sources said Tata Sons will give the former chairman an opportunity to voluntarily step down from his positions in the subsidiaries. The group is planning to move resolutions to evict him if he is not going to quit himself, The Economic Times reported.
An official was quoted by the newspaper as saying: “In the event Mistry doesn’t step down either on his own or after prodding from the board, Tata Sons as the key shareholder will be forced to call for an EGM by issuing a special notice. They will work with both foreign and domestic institutional investors to rally support.”
“Tata Sons has given corporate guarantees on behalf of most of the group companies. Most institutional investors know the power of the Tata brand,” the official added.
Meanwhile, Mistry’s family has no plans to sell its 18.5% shares in Tata Sons, nor has it been approached by any potential investors, media reports said citing people close to Mistry.
Mistry, who was chosen as Ratan Tata’s successor in November 2011, was removed from the post of chairman citing a “lack of performance”. Ratan Tata is acting as the Interim Chairman of the group now.
Evicting Mistry will be difficult task now as Tata Sons doesn’t hold a majority of the stock in several companies under the group, reports said.
Since the removal of Mistry, Tata’s listed companies have lost a combined $3.5 billion in market value.