Amidst Boardroom Manoeuvrings, A Silver Lining For The Tata Group

Amidst Boardroom Manoeuvrings, A Silver Lining For The Tata Group

Troy Powers
December 2, 2016

TCS, in which Tata Sons holds 73.26 per cent, is the first Tata company to hold an EGM for the removal of Mr Mistry as director. Wadia believes the act of "support" prompted Tata Sons to turn "vindictive" and seek his removal from the board of Tata Steel.He reiterated that he "owed no fiduciary duty to an undefined "Tata Group". In Tata Steel, for instance, while Tata Sons have a 29.75% stake, insurance companies and FPIs have a combined voting right of 32.88%.

Consequently, the ratings of the group's four operating companies - Tata Motors, Tata Chemicals, Tata Steel and Tata Power - will continue to include a one notch uplift, based on Moody's assessment of support for the companies from Tata Sons, in times of need.

Mint has a copy of the letter.

Stating that he stands behind whatever he had said in his earlier letters, Wadia said he felt compelled to initiate proceedings. Wadia pointed that the Special Notice seeking his removal was signed by all Tata Sons directors, except Mistry and Farida Khambatta.

"You having admitted that you are not required "to even provide any reasons" and instead chose in order to defame me deliberately gave the Special Notice making such false allegations and statements against me", wrote Wadia.

In April 2012, Cyrus Mistry became Chairperson of TCS after being appointed Chairperson and Executive Director of Tata Sons, TCS' holding company. "It is therefore obvious that the only objective of your explanatory statement, which was not required under law as stated by you was with the sole goal of defaming me".

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"The allegations that my correspondence is obviously an attempt to try and carry on media trial is false and incorrect", he said in the latest letter to Tata Sons.

It has asked shareholders of Tata Consultancy Services to vote at the forthcoming extraordinary general meeting for the resolution calling for the removal of Mr Mistry as a director of TCS.

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On November 21, Wadia threatened civil and criminal defamation suit against Tata Sons, for alleging alleged that he (Wadia) was acting in concert with Cyrus Mistry and against the interests of principal shareholders by galvanising independent directors.

"We are aware that the boards, and the independent directors of some Tata companies (Indian Hotels and Tata Chemicals), have come out unequivocally in support of Cyrus Mistry", the statement added.