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Tata Chemicals, Tata Power move to oust Cyrus Mistry

22 November, 2016

Tata Chemicals Ltd said on Tuesday it has called a meeting of shareholders on 23 December to consider a proposal to remove chairman Cyrus Mistry and independent director Nusli Wadia from its board.

The shareholder meeting will also discuss including Bhaskar Bhat and S Padmanabhan into the board, the company said in a stock-exchange filing.

The move comes after Tata Sons Ltd, the group holding firm and which holds a 19.35% stake in Tata Chemicals, served a notice to the company seeking a meeting of shareholders to discuss these proposals.

Separately, Tata Power Company Ltd said it has received a notice from Tata Sons to call a meeting of shareholders to remove Mistry from the board. Tata Sons holds a 31.05% stake in the power company. 

Tata Chemicals joins Tata Consultancy Services Ltd and Indian Hotels Co. Ltd in calling for a meeting of shareholders to remove Mistry. On Monday, Indian Hotels said it had called a meeting of shareholders on 20 December. TCS’s shareholder meeting will be held on 13 December.

Tata Sons had fired Mistry as its chairman last month and named his predecessor Ratan Tata as interim chief. It has now stepped up the offensive against Mistry and those seen supporting him, starting with industrialist Nusli Wadia.

Mistry has termed his sacking illegal and has been digging in his heels for a prolonged fight. He remains the chairman of several Tata group companies including Indian Hotels, Tata Steel Ltd, Tata Motors Ltd, Tata Power Company, Tata Industries Ltd and Tata Teleservices Ltd. 

Earlier this month, Tata Sons had removed Mistry from the chairman’s post at TCS, the group’s cash cow in which it holds a majority stake. It had also sacked Mistry from the chairman’s post at Tata Global Beverages Ltd.

But Tata Sons doesn’t hold a majority stake in many group companies, including Indian Hotels and Tata Chemicals, and could find it difficult to remove Mistry from these firms. What would make it even more difficult is that independent directors of Indian Hotels had backed Mistry earlier this month and “praised steps taken by him in providing strategic direction and leadership” to the company. 

Independent directors of Tata Chemicals have also supported Mistry. Tata Chemicals has four independent directors—industrialist Nusli Wadia, DCB Bank chairman Nasser Munjee, former NABARD chief YSP Thorat and marketing veteran Vibha Paul Rishi. Bhat had quit Tata Chemicals’ board after independent directors backed Mistry.

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Tata Chemicals, Tata Power move to oust Cyrus Mistry

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