Mumbai: Tata Sons Ltd plans to remove Cyrus Mistry as director on its board as the bitter feud between the Tata group holding company and its ousted chairman reaches the courts, said two people aware of the development.

“Tata officials are going to meet over the next couple of days to take stock of the entire situation. There is a proposal to remove Mistry from the board," said one of the two on condition of anonymity.

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The Economic Times first reported this on its website on Tuesday.

A Tata Sons spokesperson said it had not taken any such decision. Mistry’s office declined to comment.

The holding company of the salt-to-software Tata group removed Mistry as chairman on 24 October. Later, in the war of words that followed, Tata Sons said Mistry had betrayed the trust it had reposed in him and accused him of seeking to control the main operating companies of the Tata group. Mistry, on his part, pointed to a raft of alleged corporate governance violations in group companies and accused Tata Trusts, the biggest shareholder in Tata Sons, of excessive interference.

Tata Trusts collectively holds a little over two-thirds of Tata Sons. The Mistry family-controlled Shapoorji Pallonji group holds about 18.5%. If Mistry is indeed removed as director, it would be the first time in at least two decades that a member of the Shapoorji Pallonji family would not have a seat on the Tata Sons board.

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Cyrus Mistry first became a director in Tata Sons in 2006 after his father stepped down from that position. He was part of the selection committee to choose Ratan Tata’s successor as Tata Sons chairman before he reluctantly accepted the post.

“The Tata Trusts can bring a resolution to remove him as a director," said J.N. Gupta, co-founder and managing director of proxy governance firm Stakeholder Empowerment Services. “Normally, it would be seen as a bad move since it will come across as suppression of a minority shareholder. But in the context of the Tata Sons allegations of Mistry passing documents, etc. (to Shapoorji Pallonji group investment firms ), it might appear to be a right decision."

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The move by the Tata group to eject Mistry from the board of the holding company comes after Mistry stepped down from the boards of operating companies such as Tata Motors Ltd and Tata Steel Ltd ahead of shareholder meetings called to oust him. At that time, Mistry said he wanted the battle to be not about him and promised to take the fight to a larger platform.

Subsequently, the Mistry family-owned investment firms, Cyrus Investments Pvt. Ltd and Sterling Investment Corporation Pvt. Ltd moved a petition in the National Company Law Tribunal to protect their interests against mismanagement and oppression of minority shareholders at Tata Sons.

At the initial hearing, the tribunal asked all stakeholders including Mistry to file their replies before the next hearing on 31 January.

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