TCS, Indian Hotels call EGMs

Tata Sons had stated that ousted chairman Cyrus Mistry's conduct had caused enormous harm to the Tata group, says TCS

Information technology (IT) services major Tata Consultancy Services (TCS) and Indian Hotels have called extraordinary general meetings (EGM) to try to remove ousted chairman Cyrus Mistry from their board of directors.

In a filing on Monday, TCS said its 73% shareholder Tata Sons had requisitioned an EGM. In the explanatory statement, TCS said that Tata Sons had stated that ousted chairman Cyrus Mistry’s conduct had caused enormous harm to the Tata group, TCS, and stakeholders such as employees and shareholders. 

TCS, on November 17, had told the exchanges that the company would call an EGM on December 13, to seek removal of Mistry as director of the company. 

On November 11, TCS informed the stock exchanges that Tata Sons had nominated Ishaat Hussain as the Chairman in place of Mistry. 

In a BSE filing on Monday, the Indian Hotels Company, too, said the board of directors of the company, had, pursuant to the special notice and requisition (November 9) sent by Tata Sons, had decided to convene an EGM, to consider and if thought fit, to pass an ordinary resolution for removal of Mistry as director of the company. The EGM will be held on Tuesday, December 20.

“Mistry has made certain unsubstantiated allegations, which cast aspersions not only on Tata Sons and its board of directors, but also on the Tata group as a whole, of which TCS is an integral part,” Tata Sons informed shareholders in the TCS notice. 

It added, “A communication, which was marked as ‘confidential’, was made public. Mr Mistry’s conduct has caused enormous harm to the Tata group, TCS and its stakeholders, including employees and shareholder.” 

Tata Sons also informed that TCS was an integral part of the Tata group and enjoyed right to use the Tata brand name by virtue of brand equity and business promotion agreements entered with Tata Sons. 

“Substantial goodwill and benefits accrue to TCS by such usage of the Tata brand and association with Tata group,” said the company.

The TCS board of directors was in agreement with the removal Mistry as director of the company, as it would be in the best interests of the company, TCS said in the explanatory statement.

   

On October 24, Mistry was removed as chairman of Tata Sons and the board made his predecessor Ratan Tata interim chairman. 

Since then, Mistry has been ousted as chairman from group companies such as TCS and Tata Global Beverages. Tata Sons has also called for a shareholders’ meeting in other companies such as Indian Hotels, Tata Steel, Tata Motors and Tata Chemicals. 

Tata Sons has 73% stake in TCS. Mistry, in his personal capacity, has about 41 lakh shares in TCS, which at current share prices of Rs 2,132.5 per share, values his stock about Rs 850 crore.

READ OUR FULL COVERAGE ON THE US PRESIDENTIAL ELECTION