Tata Steel board has ousted Cyrus Mistry as chairman of the company, bringing in former State Bank of India chairman, OP Bhatt as the interim chairman till the extraordinary general meeting on December 21. Officials said, six directors of the company supported the resolution for the removal of Mistry at the board meeting which was held last week, while three, including Nusli Wadia and Subodh Bhargava opposed the move.
This is the third Tata company to show Mistry the door as the chairman. "In view of the current situation, Special Notice and requisition, received from Tata Sons, the board through circular resolutions dated November 25, passed by majority consent, has decided to replace Cyrus Mistry as the chairman with immediate effect and selected OP Bhatt, an independent director as the chairman of the board," the company said. A statement to the stock exchanges said, "The board appointed the independent director as the chairman keeping in mind principles of good corporate governance and to provide impartial leadership to the Company in its preparation and conduct of the EGM. This decision was taken to also ensure stability to the company and in the larger interest of Tata Steel's stakeholders including but not limited to employees, trading partners, financial stakeholders and local community around its operations."
The statement added, "OP Bhatt was appointed as an independent director of the company on June 10, 2013. He has served as the chairman of State Bank of India... He serves as an independent director on several Board's, including Standard Chartered Bank plc, Tata Consultancy Services and Hindustan Unilever." The group are likely to bring different Chairmen for various group companies instead of the earlier practice of Tata Sons chairman heading important companies in the group like TCS, Tata Steel and Tata Motors. The EGM of Tata Steel will consider the removal of Mistry and Nusli Wadia as directors of the company.
Wadia had written three letters to the Tata Sons' board responding to the notice issued to the board of directors of Tata Steel seeking his ouster as an independent director. He termed the allegations made by Tata Sons to the board as "false, defamatory, and libelous", and has sought the withdrawal of the notice. He has also charged the board of Tata Sons of embarking on "personal vendetta" for discharging his duties as an independent director.
Meanwhile, two prominent former employees of the Tata Group have set aside insinuations made by Mistry that Ratan Tata tried to sell the group's crown jewel Tata Consultancy Firm to US-based tech giant IBM and acquired British steelmaking company Corus at twice the cost.
“Mistry's comments regarding the sale of TCS to IBM at some 'unspecified point in time' are not correct. I was actively involved in the decision to bring IBM to India. A JV for hardware manufacturing and support in India, Tata IBM, was set up in 1991-92. This JV was undertaken to promote a computer hardware industry in India which was non-existent at that time," said former CEO and Deputy Chairman of TCS, F C Kohli.
