Tata Steel removes Cyrus Mistry as chairman, calls EGM on 21 December

Tata Steel has removed Cyrus Mistry as its chairman with immediate effect, making O.P. Bhatt an interim chairperson till the extraordinary general meeting


The board of directors removed Cyrus Mistry through a circular resolution dated 25 November passed by majority consent. Photo: Aniruddha Chowdhury/Mint
The board of directors removed Cyrus Mistry through a circular resolution dated 25 November passed by majority consent. Photo: Aniruddha Chowdhury/Mint

Mumbai: Tata Steel Ltd on Friday removed Cyrus Mistry as chairman with immediate effect and named O.P. Bhatt interim chairman, the company said in a filing to the stock exchanges.

The company has decided to call an extraordinary general meeting (EGM) of shareholders on 21 December to seek Mistry’s removal as a director, it said.

The board of directors removed Mistry through a “circular resolution dated 25 November passed by majority consent”, the company said.

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Company directors can pass circular resolutions without having to meet; they are typically used in the case of routine and non-contentious issues that arise between board meetings.

On 15 November, the board of Tata Global Beverages Ltd replaced Mistry with Harish Bhat as its chairman. Earlier, Tata Consultancy Services Ltd replaced Mistry and appointed Ishaat Hussain as interim chairman.

After the boards of some group firms like Tata Chemicals Ltd and Indian Hotels Co. Ltd supported Mistry’s continuance as chairman, Tata Sons called for a shareholder meeting to eject him as a director.

Company directors can pass circular resolutions without having to meet; they are typically used in the case of routine and non-contentious issues that arise between board meetings.

Tata Sons Ltd, the group holding company, has been seeking Mistry’s removal from various operating companies after sacking him as chairman on 24 October in a move that triggered a bitter feud.

On 15 November, the board of Tata Global Beverages Ltd replaced Mistry with Harish Bhat as its chairman.

Earlier, Tata Consultancy Services Ltd replaced Mistry and appointed Ishaat Hussain as interim chairman.

After independent directors of some group firms such as Tata Chemicals Ltd and Indian Hotels Co. Ltd supported Mistry’s continuance as chairman, Tata Sons directed operating companies to call for shareholder meetings to eject him as a director.

A person close to Mistry said this “unprecedented erosion of core Tata values is seriously damaging Brand Tata”.

“Each time one thinks the current standard of corporate governance in Tata group listed companies under the leadership of the Interim Chairman cannot hit a newer low, one has been belied,” the person said on condition of anonymity.

The resolution to remove Mistry was moved just minutes before a convened and pre-scheduled board meeting, the person said, alleging that “those involved are representatives of Tata Sons, those drawing large remuneration from other Tata Trustee-controlled companies, and an “independent” director, who is the wife of a newly-inducted Tata trustee, who is also recently nominated director of Tata Sons.”

Earlier this month, independent directors of Tata Steel met separately ahead of the board meeting that was called to declare the company’s second-quarter earnings.

These included Mallika Srinivasan, who joined the conference through video link, O.P. Bhatt and Andrew Robb, Nusli Wadia and Subodh Bhargava.

The independent directors were divided in their support to Mistry.

Unlike other firms, Tata Steel did not notify the exchanges on the outcome of the independent directors’ meeting.

In a separate filing to the exchanges on Friday, Indian Hotels Co Ltd, which runs the Taj group of hotels, said the company has decided to call an extraordinary general meeting of shareholders to seek the removal of Mistry as a director.

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