Tata Global Beverages on Tuesday became the second group company to remove Cyrus Mistry as chairman three weeks after the holding company Tata Sons had done so.
In a filing with the Bombay Stock Exchange, the company said that its board had decided to remove Mistry as chairman and appoint non-executive director Harish Bhat in his place. Bhat is a former member of Mistry’s so-called Group Executive Council, which has since been disbanded.
Tata Global said that 7 out of the 10 directors had voted for Mistry’s removal. IT giant TCS, the biggest company in the Tata Group too has removed Mistry from the helm since the group holding company did so on 24 October.
Independent directors on the boards of some group companies including Tata Chemicals, Tata Motors and Indian Hotels have however backed Mistry in a battle that has taken India Inc. by storm.
Meanwhile, the war of words between Mistry and the Tata Group on Tuesday escalated with Mistry rubbishing allegations made against him by the Tatas.
Mistry termed the allegations of rising impairment losses and expenses were “another brazen attempt” to “mislead” the general public and the company’s shareholders.
Mistry said that all decisions were taken in line with the values of the group and the consent of the board, and questioned decisions like a Rs 400 crore investment in Nagarjuna Refineries and the joint venture with the South African Sasol group.
Mistry further said that the investment in aerospace company Piaggio Aero with “a friend of Mr. Tata (Ratan Tata)” was “distressing.” He said that Tata Sons exited Piaggio at a commercial loss of Rs 1,150 crore.
Mistry’s latest statement comes in response to a 9 page statement issued by Tata Sons, in which the company had levelled several allegations against him. Tata Sons had accused Mistry of betraying the trust reposed in him.
The company said that Mistry sought to control the main companies of the group “to the exclusion of Tata Sons and other Tata representatives.” “It is unfortunate that Tata Sons, acting in good faith, did not anticipate such devious moves by Mr. Mistry and thereby did not inform the other directors of the operating companies about its dissatisfaction with Mr. Mistry at the level of Tata Sons,” the statement had said.
Mistry on Tuesday further said that Tata Sons bore the entire cost of the office of Ratan Tata, who was chairman emeritus and pegged the same at Rs 30 crore.
Apart from this, Mistry said that another significant difference in expenses was on account of the fact that “the cessation of services by Ms. Nira Radia (Vaishnavi Communication) who was being paid approx. Rs 40 Cr per year.”
Mistry said that Radia had “been replaced by Mr. Arun Nanda (Rediffusion Edelman)” who was brought in by Ratan Tata “at a cost of Rs 60 Cr per year.”
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