TCS calls 13 Dec shareholder meeting for Mistry removal vote
TCS to hold extraordinary general meeting to decide on the removal of former chairman Cyrus Mistry as director
Mumbai: The spat between Tata Sons Ltd and its ousted chairman has entered a decisive phase as Tata Consultancy Services Ltd (TCS) became the first group company to fix a date for a shareholders’ meeting to remove Cyrus Mistry as director.
The board of the Tata flagship firm, which met on Thursday, will hold the extraordinary general meeting (EGM) on 13 December, it said in a stock exchange filing. Last week, Tata Sons replaced Mistry as chairman of TCS with Ishaat Hussain, using its powers under the software maker’s articles of association.
Mistry didn’t attend the TCS board meeting, said a person close to the ousted chairman, although he remains a director.
TCS is among the seven big Tata companies where Mistry is a director (and in some cases, also chairman). Tata Sons has requested for shareholder meetings in other companies such as Indian Hotels Co. Ltd, Tata Steel Ltd, Tata Motors Ltd and Tata Chemicals Ltd.
In the last three, the holding company of the Tata group has also sought the ouster of independent director Nusli Wadia from the board.
“The TCS EGM will be the start of the end game,” said Shriram Subramanian, managing director and founder at InGovern Research, a proxy advisory firm. Considering that Tata Sons controls 73.26 % in the firm, the outcome is a foregone conclusion, he said alluding to it as “low-hanging fruit” for Tata Sons.
For the resolution to pass, Tata Sons needs the support of at least 51% of shareholder votes—this should include those present and voting. In the case of TCS, they don’t need the support of other shareholders. But in other companies where Tata Sons wants to oust Mistry, its ownership (including those of associated group companies) amounts to less than 35%.
The other Tata group companies are yet to fix a date for the shareholder meetings seeking Mistry’s ouster. Tata Sons is yet to request such a meeting in two other companies, Tata Power Co. Ltd and Tata Global Beverages Ltd. In the coffee and tea company, the board passed a resolution to move Mistry as chairman on Tuesday, a move which a statement from his office termed illegal, as it wasn’t on the agenda.
In a statement to stock exchanges on Thursday, Tata Global Beverages said that its filing reflected the decision made by the board at the Tuesday meeting and therefore, “the allegations made by Mistry’s office and quoted in the media are incorrect”.
Separately, the board of Tata Sons also met on Thursday. Mistry didn’t attend this meeting too, said the person quoted earlier.
Another person aware of the development said that the board agenda at Tata Sons mostly centered on “routine matters” such as accounts and there was no discussion on Mistry’s removal. The board met for the first time since Mistry’s ouster.