Cyrus Mistry-Ratan Tata spat: A look at how the events unfolded
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Mumbai: On 24 October, the board of Tata Sons Ltd replaced Cyrus P. Mistry as chairman, less than four years after he took the helm, and named his predecessor Ratan Tata interim chairman for four months without citing any reasons. Since then, Tata Sons and its former chairman have traded charges of corporate governance violations and incompetence in an increasingly bitter spat.
Independent directors of some Tata group companies have backed Mistry as chairman, Tata Sons, in turn, has called shareholders’ meetings to eject him as a director. As the spat continues, the lens will shift to the role of independent directors and institutional shareholders at Tata group in the coming days. Here is a timeline of recent events at Tata group.
29 November 2016: Tata Power Co. Ltd fixes 26 December for an extraordinary general meeting (EGM) to seek removal of Cyrus P. Mistry as a director.
28 November: Tata Chemicals Ltd fixes 23 December for an extraordinary general meeting (EGM) to seek removal of Cyrus P. Mistry as a director and Nusli Wadia as an independent director from its board.
25 November: Tata Global Beverages passes circular resolution to remove Cyrus Mistry, days after voting him out; move is seen as a bid to avoid legal complications.
25 November: Tata Steel passes a circular resolution to remove Mistry and replaces him with O.P. Bhatt as interim chairman.
23 November: Tata Group Wednesday pulls out the big guns from its old guard to rebut Mistry allegations. FC Kohli says group had no intentions to sell TCS. B. Muthuram says “ surprised and very sad” about Corus allegations; Tata Steel’s long-term strategy was to grow inorganically.
22 November: Ratan Tata once tried to sell TCS to IBM, claims Cyrus Mistry. Corus buy, the result of “one man’s ego,” says ousted chairman.
21 November: Nusli Wadia writes a letter to Tata Sons directors saying that the move to seek his expulsion is “false, defamatory, baseless and libellous”, pointing out that the allegations have been made with an intent to harm his reputation; gives Tata two days notice to withdraw resolution.
21 November: TCS issues EGM notice; says company board agrees with Tata Sons’ explanation seeking Mistry’s removal. Mistry’s conduct, upon his removal as executive chairman of Tata Sons, has caused enormous harm to Tata group, co. and stakeholders, including employees and shareholders, says the filing to Bombay Stock Exchange.
17 November: TCS board meets and fixes 13 December as the date for the extraordinary general meeting to remove Mistry as director.
17 November: Tata Sons board meets and discusses “routine affairs”. Mistry doesn’t attend.
15 November: Tata Global Beverages says seven out of 10 directors at the company’s board meeting voted for removal of Cyrus Mistry as chairman.
15 November: Cyrus Mistry questions Tata Son’s investments in certain companies, high public relations (PR) costs, the compensation of Ratan Tata and the practice of directors drawing commissions from operating companies.
14 November: Ratan Tata meets finance minister Arun Jaitley.
14 November: News about Venu Srinivasan, board member in Tata Sons, joining Sir Dorabji Tata Trust as one of its trustees on 31 October becomes public.
14 November: Independent directors at Tata Motors refuse to take sides, saying the auto maker’s board was collectively responsible for all decisions relating to strategy and operations.
13 November: Tata Sons says it will do whatever is necessary to deal with the fallout of Mistry ouster; asks independent directors to ensure future of Tata companies and interest of all stakeholders is protected.
13 November: Mistry’s office rebuts charges that he was trying to gain control of Tata firms; says a new structure was created with an eye on improving transparency and reflects “generational change”.
11 November: Bhaskar Bhat, a non-independent director on the board of Tata Chemicals, resigns, saying the contents in the statement by independent directors ‘dilutes’ his views expressed in the board meeting.
11 November: Tata Sons moves resolutions to eject Mistry and Wadia as directors of Tata Steel, Tata Chemicals and Tata Motors.
10 November: Independent directors of Tata Chemicals, including Nusli Wadia, back Mistry as chairman, citing their evaluation of his performance for the past couple of years.
10 November: Tata Sons releases a nine-page statement detailing reasons why Mistry was ousted. It accuses Mistry of betraying the trust reposed in him and seeking to control the main operating companies of the Tata group “to the exclusion of Tata Sons and other Tata representatives”.
10 November: Tata Sons replaces Mistry as chairman of Tata Consultancy Services Ltd with Ishaat Hussain as interim chairman. Separately, it calls for a shareholders’ meeting of Indian Hotels to pass a resolution for the removal of Mistry as director.
05 November: Tata Motors Ltd defends and clarifies credit and accounting practices related to the Nano car and Tata Motors Finance, its vehicle finance arm.
04 November: Independent directors of Indian Hotels unanimously back Mistry as chairman of the company.
04 November: Tata Sons outlines new reponsibilities for Mukund Rajan and Harish Bhat. Says group human resources responsibilities will be overseen by S. Padmanabhan.
01 November: Indian Hotels Co. Ltd says N.S. Rajan has resigned from its board. Tata Chemicals Ltd informs bourses that Nirmalya Kumar has stepped down from its board.
01 November: Ratan Tata writes a letter to the staff of Tata group companies saying that the removal of Mistry was “absolutely necessary for the future success of the Tata group”.
01 November: Mistry’s office releases a statement rebutting allegations that he kept the Tata trustees in the dark on transactions such as Tata Power Co Ltd’s purchase of Welspun Renewable Energy Pvt. Ltd and his handling of a spat with NTT DoCoMo Inc.
27 October: Tata group companies write back to exchanges assuring them that their accounts are in order. Tata Steel’s management assures investors at a meeting that contrary to reports it was still firm on the sale or joint venture plan for its European business and the sale of its UK specialty steel business was on track.
26 October: Stock exchanges ask Tata group companies such as Indian Hotels Co. Ltd, Tata Steel Ltd and Tata Motors Ltd for a clarification after Mistry, in his leaked email, calls them “legacy hotspots”.
25 October: The Tata group files caveats in the courts seeking advance notice from Mistry were he to initiate legal action.
25 October: Ratan Tata calls for a meeting of Tata group chief executive officers. Also meets investors such as Life Insurance Corporation of India to assure them that it is “business as usual.”
25 October: Mistry writes an email to the board of Tata Sons, which gets leaked. In his e-mail, Mistry warns of a potential $18 billion writedown faced by the group and alleges corporate governance violations.
24 October: The group executive council (GEC), which advised the Tata Sons chairman, is disbanded. Nirmalya Kumar, Madhu Kannan and N.S. Rajan are asked to leave, while Mukund Rajan and Harish Bhat are retained.
24 October: Cyrus Mistry is ousted as chairman of Tata Sons and replaced by Ratan Tata as interim chairman. A search committee is constituted to find Mistry’s replacement.
15 September: Meeting of the board of Tata Sons. Mistry presents an updated version of a strategy document which outlines plans till 2020.
26 August: Amit Chandra is nominated as a director in Tata Sons by Tata Trusts, which has the powers to recommend one-third of the board of directors in the holding company.
25 August: At the annual general meeting of Tata Sons, Srinivasan and Piramal are confirmed as directors by shareholders.
8 August: Ratan Tata, chairman of Tata Trusts, nominates Venu Srinivasan and Ajay Piramal as additonal directors on the Tata Sons board.
25 June: The nomination and remuneration committee of the Tata Sons board recommends a raise for chairman Cyrus Mistry. It also discussed formalizing the governance structure between various entities in the group such as Tata Trusts, the trustees and boards and directors of group operating companies.