Tata Sons seeks IHCL shareholders’ nod to remove Cyrus Mistry
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New Delhi: Tata Sons has asked shareholders of Indian Hotels Co Ltd (IHCL)—the firm that runs Taj Group of Hotels, to remove Cyrus P. Mistry as director of the company as he has caused “enormous harm” to the group as well as IHCL and its stakeholders.
In a resolution moved by the holding company of the Tata Group for consideration of an Extra Ordinary General Meeting (EGM) on 20 December, it said Mistry after being removed as chairman of Tata Sons had “made certain unsubstantiated allegations, which cast aspersions not only on Tata Sons Ltd and its board of directors, but also on the Tata Group as a whole, of which IHCL is an integral part”.
Alleging that Mistry had made confidential communication public, Tata Sons said his “conduct has caused enormous harm to the Tata Group, IHCL and its stakeholders, including employees and shareholders”.
Attributing the abrupt 24 October removal of Mistry as head of Tata Sons—the holding company of the over $100 billion salt-to-software group, to a combination of several factors, it said the removal was “absolutely necessary for the future success of the Tata Group”.
“IHCL, of which Tata Sons Ltd is a promoter, forms an integral part of the Tata group and enjoys the right to use—‘A Tata Enterprise’ by virtue of the Tata brand equity and Business Promotion Agreement entered into between IHCL and Tata Sons Ltd.
“Substantial goodwill and benefits accrue to IHCL by such usage and association with the Tata group,” it added. In a filing to bourses IHCL today said an Extra Ordinary General Meeting (EGM) would be held on 20 December 2016 to consider removal of Cyrus Mistry as director of the company. The company said notice is given on the requisition of Tata Sons which holds 28.01% of the share capital of the company.
The EGM will meet to consider and if thought fit pass the resolution for removal of Cyrus P. Mistry from the office of the director of the company with effect from the date of the meeting. Mistry continues to be the chairman of IHCL. The Ratan Tata-led interim management of Tata Sons is seeking to oust Mistry from his positions in the operating group firms.
The EGM comes after the company’s board of directors on 4 November supported Mistry’s leadership and continuance as chairman of the company. In a sudden and dramatic turn of events last month, Mistry was unceremoniously removed as the chairman of Tata Sons and replaced by his predecessor Ratan Tata in the interim, triggering a confrontation between the single-largest shareholder and the Tatas.