Tata Sons' ousted chairman Cyrus Mistry in a surprise move late on Monday said he was resigning from the boards of all listed Tata companies, but he vowed to keep fighting to improve governance within the $100 billion software-to-salt conglomerate.
In a letter to all shareholders, Mistry hinted that he plans to continue his battle against Tata Sons in court
In an interview to Business Standard, Mistry promised to take his fight against the Tatas to a legal forum but did not give details. “In the past eight weeks, I saw a lot of coercive action from the Tatas towards shareholders, debt holders and employees, which is making all the three uncomfortable. In various representations to shareholders, I had said it was not about me or about my position. My resignation proves that," Mistry said. ( Read more here)
Mistry has for weeks waged a war of words against Tata Sons and Tata family patriarch Ratan Tata, who is back at the helm of the conglomerate on an interim basis.
Mistry has alleged that Tata and his long-time aide Noshir Soonawala, both trustees of Tata Trusts which owns a majority stake in Tata Sons, undermined group company boards by demanding a say in key internal matters years after they had retired. Tata Trusts is a group of public charities.
Tata Sons has rejected the allegations, and on Monday it reiterated its stance, calling Mistry's allegations "baseless, unsubstantiated and malicious." ( Read more here)
Mistry's surprise resignation comes just ahead of a series of special shareholder meetings called by Tata Sons to oust him from the boards of five Tata companies, Indian Hotels, Tata Steel, Tata Motors, Tata Chemicals and Tata Power.
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The meetings to vote on Mistry's ouster were set to begin on Tuesday. While the Indian Hotels and Tata Motors meetings are likely to be rendered not required, a spokesman for Tata Sons said the other three meetings are likely to go ahead as Tata Sons is also seeking to oust independent director Nusli Wadia from those group company boards.
Wadia has publicly backed Mistry's allegations of corporate governance failures within Tata Sons, and accused both Tata and Soonawala of overstepping boundaries.
Tata Sons, in its statement on Monday, said Mistry's move to resign came as he was aware that Tata Sons was set to secure the necessary support to oust him at the upcoming meetings.
Tata Sons owns substantial stakes of over 30 percent in all of the five Tata companies that had upcoming meetings, and Tata Sons' moves to oust Mistry were widely expected to succeed.
Mistry, who continues to be a director on the board of Tata Sons where his family owns a more than 18 percent stake, vowed to keep fighting his campaign.
"It is time to shift gears, up the momentum, and be more incisive in securing the best interests of the Tata Group," he said in his letter on Monday, the latest of several exchanged between the two camps over the last two months.
"It is with this thought that I have decided to shift this campaign to a larger platform and also one where the rule of law and equity is upheld."
With inputs from Agencies
With inputs from Agencies