CHENNAI: After having defeat after defeat handed out in the war raging across the boardrooms of Tata Group, ousted chairman Cyrus Mistry declared that he will resign from the boards of all Tata companies, effectively giving up fighting for his posts in the upcoming extraordinary general meetings. Instead, Mistry will take the Tatas to court.
In a statement on Monday night, Mistry indicated that the legal recourse is likely to focus on the relationship between Tata Sons and Tata Trusts, which hold 66% in Tata Sons and is believed to have been instrumental in sacking Mistry and embroiling the group in a war of words on each other’s poor corporate governance practices.
“The time,” Mistry said, “has to come to take matters to their logical conclusion. I will work on protecting the interests of the Tata Group and realizing the vision of our Founder, Jamsetji Tata, until my last breath.”
Tata Sons had lined up extraordinary general meetings of Tata Consultancy Services, Tata Motors, Tata Power, Tata Chemicals, Indian Hotels and Tata Steel this month to remove Mistry.
So far, it has been successful in replacing Mistry as chairman of TCS and removing him from the board through the following EGM. The other EGMs are set to be held very soon. However, Mistry said that he has decided to shift to a larger platform where “rule of law and equity” are upheld and he would resign from these companies as the EGMs were creating uncertainty and he did not want to disrupt company operations.
“It is now clear that my attempt to protect and preserve the ethical legacy of our founding father, Jamsetji Tata, was the real cause for my ouster. The pursuit of good governance and ethical business seem to have caused a serious discomfort in some quarters,” he stated, adding, “I had initially not thought that one would need to seek an external forum to adjudicate issues that should never have arisen in the first place.”
Mistry also pointed out that his repeated raising of corporate governance issues had elicited no response from Tata Sons.
“Bringing to the fore these ethical issues can have a short-term adverse impact on the Tata Group. However, I feel strongly that such short-term pain is necessary for the long-term interests of employees, public shareholders and other stakeholders of the Tata Group,” he stated. “As a large shareholder of Tata Sons and a proud long-term partner, my family will also equally suffer this pain.”
However, late on Monday night, Tata Sons responded by saying that Mistry’s action was deliberate and that he was fully aware that majority of the shareholders are not in support of his actions.