All 6 independent directors of Taj Group back Mistry
Reeba Zachariah
|
Mumbai:
|
Tell Bourses He Has Their Full Confidence
In what is being viewed as a setback for Ratan Tata and the board of Tata Sons, which sacked Cyrus Mistry last week, all six inde pendent directors of Tata Group's Indian Hotels Company publicly reposed faith in Mistry's leadership on Friday ahead of a board meet.Nadir Godrej, Deepak Parekh, Keki Dadiseth, Ireena Vittal, Gautam Banerjee and Vibha Paul Rishi met at the group's headquarters, Bombay House, and were unanimous in their praise for Mistry's strategic direction and le adership. What surprised observers was the stand taken by Dadiseth, a trustee of the Sir Ratan Tata Trust.
The board of IHCL, known as the Taj Group, has 10 members, including Mistry and his brother, Shapoor. The six directors are the first to endorse Mistry since he was axed as Tata Sons chairman. The support from IHCL's independent directors for Mistry comes against the backdrop of the rift between Ratan Tata and Mistry , who was abruptly removed as chairman of Tata Sons, the main promoter of IHCL, on October 24.
What surprised Tata observers was the stand taken by Keki Dadiseth, a trustee of the Sir Ratan Tata Trust (SRTT) which is headed by Ratan Tata. SRTT is one of the two principal Tata Trusts which control 66% in Tata Sons; it is also a shareholder in IHCL.
In a statement to stock exchanges, IHCL's independent directors said that taking into account board assessments and performance evaluations carried out over the years, “the independent directors unanimously expressed their full confidence in the chairman, Cyrus Mistry“.
The independent directors also said that their decision was being made public because IHCL is a listed entity and it was essential for them to let the company's investors and public at large know of their views so that they could take an informed decision on its stock.
Current laws require that every year all independent directors should hold at least one separate meeting to review performance of non-independent directors and the chairperson. In two recent instances at Tata Global Beverages and Jaguar Land Rover when Mistry chaired board meetings, it involved rou tine business unlike at IHCL where audited results were being declared.
Tata Chemicals will be the next company from the group which will hold its board meeting on November 10, followed by Tata Steel on November 11. Both will take note of quarterly results, just as IHCL did.
JN Gupta, a former executive director of markets regulator Sebi, said that the move by IHCL's independent directors may get replicated in other Tata companies too.“Going forward, the battle will be tough for both Tata and Mistry camps and the stance taken by big financial institutions will be crucial,“ said Gupta.
If Tata Sons wants to remove Mistry from IHCL, it will have to call an extraordinary meeting of IHCL's shareholders to vote on Mistry's ouster. However, during the voting, Tata Sons and other promoter-shareholders will not be allowed to vote on the resolution. A spokesperson of Tata Sons declined to comment on future possibilities.
Re-affirmation of faith in Mistry's abilities by IHCL's independent directors is completely at odds with the stand taken by the majority of the Tata Sons board. After removing Mistry last month, Tata Sons had attributed a trust deficit in Mistry as the reason for his removal. “The views of independent directors seems to be in divergence with respect to the actions of IHCL's promoter shareholder, Tata Sons,“ said Shriram Subramanian, founder & MD, InGovern Research Services, a corporate governance advisory firm.
Two of the six independent directors of IHCL told TOI that they supported Mistry because they felt he was leading the company well. “Honestly , he's done a great job as chairman of IHCL,“ said one of the two.On Friday , IHCL's board, which met to consider its July-September results, reported a consolidated net loss of Rs 27 crore, substantially lower than the Rs 152crore loss it had reported a year earlier.
Call on UK future in 4 weeks: Report
London: Appointed interim chairman of Tata Group after Cyrus Mistry's unceremonious exit recently, Ratan Tata is keen to keep the UK steelworks part of the conglomerate and will make a decision in this regard within four weeks. Ratan Tata is understood to be conducting a detailed review of Tata Steel UK before making a final decision, The Guardian said. AGENCIES
The board of IHCL, known as the Taj Group, has 10 members, including Mistry and his brother, Shapoor. The six directors are the first to endorse Mistry since he was axed as Tata Sons chairman. The support from IHCL's independent directors for Mistry comes against the backdrop of the rift between Ratan Tata and Mistry , who was abruptly removed as chairman of Tata Sons, the main promoter of IHCL, on October 24.
What surprised Tata observers was the stand taken by Keki Dadiseth, a trustee of the Sir Ratan Tata Trust (SRTT) which is headed by Ratan Tata. SRTT is one of the two principal Tata Trusts which control 66% in Tata Sons; it is also a shareholder in IHCL.
In a statement to stock exchanges, IHCL's independent directors said that taking into account board assessments and performance evaluations carried out over the years, “the independent directors unanimously expressed their full confidence in the chairman, Cyrus Mistry“.
The independent directors also said that their decision was being made public because IHCL is a listed entity and it was essential for them to let the company's investors and public at large know of their views so that they could take an informed decision on its stock.
Current laws require that every year all independent directors should hold at least one separate meeting to review performance of non-independent directors and the chairperson. In two recent instances at Tata Global Beverages and Jaguar Land Rover when Mistry chaired board meetings, it involved rou tine business unlike at IHCL where audited results were being declared.
Tata Chemicals will be the next company from the group which will hold its board meeting on November 10, followed by Tata Steel on November 11. Both will take note of quarterly results, just as IHCL did.
JN Gupta, a former executive director of markets regulator Sebi, said that the move by IHCL's independent directors may get replicated in other Tata companies too.“Going forward, the battle will be tough for both Tata and Mistry camps and the stance taken by big financial institutions will be crucial,“ said Gupta.
If Tata Sons wants to remove Mistry from IHCL, it will have to call an extraordinary meeting of IHCL's shareholders to vote on Mistry's ouster. However, during the voting, Tata Sons and other promoter-shareholders will not be allowed to vote on the resolution. A spokesperson of Tata Sons declined to comment on future possibilities.
Re-affirmation of faith in Mistry's abilities by IHCL's independent directors is completely at odds with the stand taken by the majority of the Tata Sons board. After removing Mistry last month, Tata Sons had attributed a trust deficit in Mistry as the reason for his removal. “The views of independent directors seems to be in divergence with respect to the actions of IHCL's promoter shareholder, Tata Sons,“ said Shriram Subramanian, founder & MD, InGovern Research Services, a corporate governance advisory firm.
Two of the six independent directors of IHCL told TOI that they supported Mistry because they felt he was leading the company well. “Honestly , he's done a great job as chairman of IHCL,“ said one of the two.On Friday , IHCL's board, which met to consider its July-September results, reported a consolidated net loss of Rs 27 crore, substantially lower than the Rs 152crore loss it had reported a year earlier.
Call on UK future in 4 weeks: Report
London: Appointed interim chairman of Tata Group after Cyrus Mistry's unceremonious exit recently, Ratan Tata is keen to keep the UK steelworks part of the conglomerate and will make a decision in this regard within four weeks. Ratan Tata is understood to be conducting a detailed review of Tata Steel UK before making a final decision, The Guardian said. AGENCIES
No comments:
Post a Comment