New Delhi: 78-year-old Ratan Tata had a private meeting with Cyrus Mistry hours before the Tata Group’s Board of Directors met to sack the 48-year-old chairman.
According to reports, at the meeting, Ratan Tata asked Mistry to quit. Tata ‘put Mistry on notice’ – thus possibly intimating him in advance as to what would happen in the Board meeting.
Cyrus Mistry’s sacking reportedly came about as a result of Tata’s displeasure that the chairman was selling off the group’s steel interests in the UK, thus ‘throwing Ratan Tata under the bus’ – in an attempt to reduce the USD 30 billion debt the company faces.
Mohan Parasaran, one of three lawyers who is said to have advised the Tata conglomerate about how to remove Mistry, was quoted as saying that he was consulted for a month about Mistry’s dismissal and that the “Tata Board was well within its rights to remove Cyrus…it needed to be in a majority to remove him, which it has.”
Reports said that out of the nine members of the Board, 6 voted to sack Mistry, while 2 abstained.
But the agenda of the Board meeting did not contain a vote on the future of Mistry. Reportedly, Parasaran said this was brought up under the ‘any other items’ category listed at the end of every board agenda. Mistry for his part protested that such an action was illegal – that rules require a 15-day notice for matters like this. He was told the board had legal opinion backing its stand.
On Tuesday, the day after Mistry was sacked, Tata Sons filed several caveats in the Supreme Court and Bombay High Court, with an intention to prevent Mistry from legally challenging his dismissal.
Earlier, it was reported that Cyrus Mistry filed four caveats at National Company Law Tribunal against Ratan Tata, Tata Group and Tata Trusts. However, this was later denied by his office.
Meanwhile, a day after the abrupt ouster of Cyrus Mistry, Ratan Tata, who has assumed charge as interim Chairman, on Tuesday asked senior management of the conglomerate’s firms to focus on their businesses without being concerned about the top level change.
Stating that his role is for short term so as to ensure stability and continuity at the group, Tata asked top executives of the USD 100 billion conglomerate to act as leaders in respective markets and focus on enhancing returns to shareholders.
“I assumed the role of the interim Chairman for stability and continuity so that there is no vacuum. This will be for a short time. A new permanent leadership will be in place,” he said while addressing managing directors and senior leaders of Tata companies at the Bombay House.