 "Boardroom coup: 3 Tata Sons directors hired minutes before AGM")
The seeds of the coup at Tata Sons were sown on the day of the annual general meeting (AGM) of Tata Sons shareholders held on August 25 this year when the then Chairman of Tata Sons Cyrus Mistry received a proposal from Ratan Tata to appoint three new independent directors on Tata Sons board just a few minutes before the AGM was scheduled to begin, said sources close to the developments.
When contacted, a official spokesperson of the Tata Group declined to comment, but an insider said, “all due process to appoint the independent directors were followed.”
According to sources, the new names took Mistry completely by surprise. “There was no reference of new independent directors to the Nomination and Remuneration Committee (NRC) and the laid-down process to induct new directors was not followed,” said a source close to the Mistry camp. Mistry, who said he was a lame duck chairman after being ousted from the Tata Sons board as chairman, then put the three names for voting in the AGM.
These names were cleared with the trusts, which hold 66 per cent of shares in Tata Sons, voting for the proposal. The names of Piramal and Srinivasan were released to the media on the same day, while Chandra’s name was made public a day later. Interestingly, the appointment of the three directors was made after Mistry had proposed a new governing structure for the Tata Sons board in June this year.
“There was too much interference from the trusts in the running of Tata Sons’ investments,” said the source.
“The tension was simmering between the two. Besides, a financial scandal involving AirAsia was another flashpoint between Mistry and Tata. Mistry had put his foot down and wanted a full-fledged investigation by government authorities. This led to relations between the two reaching a breaking point,” the source added.
The source said in the June meeting of the NRC, Mistry capped his salary at six per cent, even though he was offered a higher salary by the NRC, led by Ronen Sen based on Mistry’s performance.
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When contacted, a official spokesperson of the Tata Group declined to comment, but an insider said, “all due process to appoint the independent directors were followed.”
According to sources, the new names took Mistry completely by surprise. “There was no reference of new independent directors to the Nomination and Remuneration Committee (NRC) and the laid-down process to induct new directors was not followed,” said a source close to the Mistry camp. Mistry, who said he was a lame duck chairman after being ousted from the Tata Sons board as chairman, then put the three names for voting in the AGM.
These names were cleared with the trusts, which hold 66 per cent of shares in Tata Sons, voting for the proposal. The names of Piramal and Srinivasan were released to the media on the same day, while Chandra’s name was made public a day later. Interestingly, the appointment of the three directors was made after Mistry had proposed a new governing structure for the Tata Sons board in June this year.
“There was too much interference from the trusts in the running of Tata Sons’ investments,” said the source.
“The tension was simmering between the two. Besides, a financial scandal involving AirAsia was another flashpoint between Mistry and Tata. Mistry had put his foot down and wanted a full-fledged investigation by government authorities. This led to relations between the two reaching a breaking point,” the source added.
The source said in the June meeting of the NRC, Mistry capped his salary at six per cent, even though he was offered a higher salary by the NRC, led by Ronen Sen based on Mistry’s performance.
READ OUR FULL COVERAGE