Tata Trusts sends requisition to oust Mistry from Tata Sons board

Mistry was sacked from Tata Sons' chairman position in October

Tata Sons board members have approved calling an extra general body meeting of the company's board to remove Cyrus Mistry as a director. With this now there will be a notice sent to Cyrus Mistry on Thursday for the EGM being called. Tata Trusts, the majority shareholders of Tata Sons, had earlier made a requisition to the holding company’s board to remove Cyrus Mistry as a director. The requisition was circulated to Tata Sons board members today who approved it. The EGM is most likely to be called early next month.  

Mistry was sacked as Tata Sons’ chairman in October. Following this, Tata Trusts sought Mistry’s removal as chairman from the boards of listed companies. After a bitter eight-week boardroom battle, Mistry resigned from the boards of all listed companies of Tata Group in December. He also took the battle to National Company Law Tribunal (NCLT) by filing a suit against Tata Sons for “oppression and mismanagement”.  NCLT's next hearing in the current case up for hearing on 31 January.

"Cyrus Mistry could possibly move NCLT to seek a stay once he receives the notice," said a person familiar with the developments. "This would of course be contested by Tata Sons," he said. Mistry's office declined to comment on the development.

Tata Trusts, the largest shareholder of Tata Sons with a 66 per cent stake, was expected to make the requisition. The Tata Sons spokesperson confirmed that a requisition has been received from a Tata Sons shareholder which has been acted upon.   

While Mistry became the chairman of Tata Sons in December 2012, he has been on the Tata Sons board since 2006. Mistry’s father Pallonji Shapoorji Mistry is the single largest shareholder of Tata Sons with 18.4 per cent stake in Tata Group’s holding company. While Cyrus Mistry's  term as Tata Sons board member is till March, the group wants to evict him as it feels no confidential business plan could be discussed anymore with Mistry as a member. 

“Under the Tata Sons article of association, the company does not have any obligation to have a representative from Pallonji family on the Tata Sons board,” says Amit Tandon, founder and managing director at proxy advisory firm Institutional Investor Advisory Services. 

“However, the appointment of a representative from Pallonji Mistry family on the Tata Sons board has been by convention as it is considered a healthy practice to have opinion of a significant minority,” he says.

Now, the future course on this will depend on the conversation between Tata Sons board and the Mistry family.