Tata Global directors might support Mistry in board meet

Mistry is likely to garner support from the directors as he got good reports from the nomination and remuneration committee of the company

The board of Tata Global Beverages will meet on Tuesday and is likely to discuss the ouster of Chairman Cyrus Mistry and its impact on the company’s operations. 

Mistry, fighting a battle with Tata Sons Interim Chairman Ratan Tata over his ouster from the group’s holding company last month, is likely to garner support from the directors as he got good reports from the nomination and remuneration committee of the company.

Tata Global Beverages has six independent directors — former Reserve Bank of India Deputy Governor V Leeladhar, TAFE Chairman Mallika Srinivasan, former McKinsey partner Ireena Vittal, Max India group Chairman Analjit Singh, former Nabard chairman Ranjana Kumar and New Silk Route partner Darius Pandole. 

Of these, Vittal had supported Mistry in the Indian Hotels’ board meeting and is expected to maintain her stand. How the other directors will vote is not certain, as most of them have not been members on the Tata boards where meetings have taken place. Ranjana Kumar headed the Nomination and Remuneration Committee (NRC) of Tata Global and had given a good report on Mistry, along with other NRC members Leeladhar and Pandole. 

At the Tata Steel board meeting, Srinivasan was one of the three independent directors who didn’t want to issue a statement on the goings-on in the company. Mallika Srinivasan’s husband and TVS group chairman Venu Srinivasan was inducted on the boards of both the group holding company Tata Sons and the Sir Dorabji Tata Trust, which hold a 28 per cent stake in Tata Sons.   

Support from the independent directors would help Mistry to make a case with the financial institutions if the company calls an extraordinary general meeting (EGM) to remove him as a director. So far, Tata Sons has asked for an EGM at Tata Consultancy Services, Tata Steel, Tata Motors, Tata Chemicals and Indian Hotels. The Tatas own 35 per cent stake in Tata Global and need a simple majority of votes to remove Mistry as director.

The Tata-Mistry fight has taken a toll on the company’s stock, which fell 23 per cent or Rs 2,243 crore since October 24 as compared to a 5.6 per cent fall in the market value of BSE companies. The boards of Indian Hotels and Tata Chemicals have supported Mistry but the independent directors of Tata Steel were split over coming out with a statement to apprise shareholders about the goings-on about the firm.

Tata Sons has already sent a notice for removal of Mistry and senior independent director, Nusli Wadia from the boards of Tata Chemicals, Tata Motors and Tata Steel. A source close to Wadia said he would write to all shareholders of these three companies, giving details of the losses incurred by these companies due to overseas acquisitions. Mistry had written a letter to Tata Sons' directors saying the group was staring at a $18 billion of potential write-downs due to overseas acquisitions made under Tata. Of this, Tata Steel Europe will have to take $10 bn of potential write-down and Tata Teleservices will have to take a write-down $4-5 bn. 

Tata Sons has alleged Mistry was trying to take over the operating companies of the Tata group in association with the independent directors.

READ OUR FULL COVERAGE OF THE TATA-MISTRY BOARDROOM BATTLE