 "Harish Bhat")
Till about a month ago, as member of the group executive council of Tata Sons, Harish R Bhat, 54, was busy implementing the road map prepared by the former chairman of Tata Sons, Cyrus Mistry, for the Tata group. Mistry, who hand-picked Bhat to join the group executive council from April 2014, was ousted by Tata Sons board on October 24.
This week, in a strange turn of events, Bhat joined the Tata group in 1987 after passing out from BITS Pilani and IIM Ahmedabad and worked in various Tata companies including Tata Chemicals under Darbari Seth (who was ousted by Ratan Tata in 1994 in a bitter corporate battle), Titan Industries and later Tata Global Beverages.
Insiders say Bhat, a fitness freak and a writer, is an old Tata hand and knows the group inside out. Despite joining the group executive council, he was careful not to ignore the old guard. “While few members of Mistry’s group executive council behaved liked super directors, Bhat was smart enough to know not to burn bridges with the old guard and with Tata’s close confidants,” says a Tata insider.
And that paid well for Bhat. In the board meeting held on November 15, Mistry’s removal as chairman was proposed. Mistry, who was chairing the meeting, objected to the proposal as it was not on the agenda and closed the meeting. Two independent directors, Darius Pandole and Analjit Singh, supported Mistry. But a statement issued to the stock exchanges said Mistry has been replaced as the chairman with seven out of 10 directors present voting in favour of his removal. The board also appointed Bhat as the non-executive director of the company, it said.
The Mistry camp said Mistry’s ouster as chairman and Bhat’s appointment was “illegal” and reminiscent of Mistry’s ouster from the Tata Sons board on October 24 as no notice was issued on the removal as well as appointment. A legal battle is expected on this.
Bhat defends the decision to remove Mistry. “I proposed a resolution (seeking removal of Mistry) as I believed that Tata Global Beverages is at significant risk from having a chairman who is in a position of hostility to the major promoter company, that is Tata Sons,” Bhat said a day after he was appointed as chairman in place of Mistry. “When you have a hostile relationship between the chairman and the primary promoter, there are significant risks which are detrimental to all stakeholders, including minority shareholders,” he told news agencies.
The risks could be about the use of the Tata trademark, attracting and retaining talent, quality of partnerships and future performance and implementation of strategic plans. “It can come from the rating that the company enjoys. The risks can arise from several such factors,” he said, adding that the interest of all stakeholders of the company, including minority shareholders, calls for a “good alignment” between the chairman and Tata Sons.
Sources close to Mistry camp say they are not expecting executive directors or those drawing salaries from Tata companies to support Mistry especially when Ratan Tata has made it clear that he is the boss again. “Those who have worked in the Tata group earlier know how vindictive Tata can be and they want to be on the right side,” says a source close to the Mistry camp.
Bhat, a Tata group insider for the last 30 years, who has seen how Tata got the better of Seth, Russi Mody and Ajit Kerkar, is clearly on the right side.
READ OUR FULL COVERAGE OF THE TATA-MISTRY BOARDROOM BATTLE
