 "Mistry faces Tata Chem board test today")
The board of Tata Chemicals is meeting here on Thursday to take a call on Chairman Cyrus Mistry who was ousted as the chairman of Tata group holding company, Tata Sons, on October 24. The independent directors were likely to support Mistry as chairman, considering his performance over the last four years,
insiders said.
With Mistry at the helm, Tata Chemicals sold off its fertilizer business in August this year for Rs 2,670 crore to Yara Chemicals, as part of its strategy to exit businesses that depended on government regulation. Mistry’s performance was lauded by Tata Chemicals’ Nomination and Remuneration Committee (NRC), chaired by senior independent director Nusli Wadia as per its annual report for financial year 2016.
The other independent directors on Tata Chemicals board are: E A Kshirsagar, Y S P Thorat. Naseer Munjee, and Vibha Paul Rishi. These directors are expected to support Mistry in the board meeting on Thursday, in a redux of the support Mistry received from the senior independent directors of Indian Hotels.
Nirmalya Kumar quit as the director of Tata Chemicals after he was removed from Mistry’s Group Executive Council (GEC) the same day Mistry was ousted from Tata Sons.
According to the company’s filings, Chairman Mistry was also evaluated on the key aspects of his role by the NRC. “In a separate meeting of Independent Directors, performance of non-independent directors, performance of the board as a whole and performance of the Chairman was evaluated, taking into account the views of executive directors and non-executive directors,” the company said, adding Mistry refused to take any remuneration from Tata Chemicals as he was Executive Chairman of the holding company.
Mistry was ousted as the Chairman of Tata Sons on October 24 and appointed 78-year-old Ratan Tata as interim chairman. Soon after his removal from Tata Sons, Mistry had alleged that he was removed despite his efforts to turn around companies in financial trouble due to the bad acquisitions by Ratan Tata during his tenure. In a communication to the Tata Sons directors and Tata Trust members, Mistry had said the group is facing potential write downs worth $18 billion across group companies, due to acquisitions that went bad and high debt. Tata has said the removal of Mistry was absolutely necessary for future success of the Tata group.
Since Mistry was ousted, the Tata group companies have lost nine per cent of its market value or Rs 80,000 crore. The BSE Sensex has lost four per cent of its value in the same period. Tata Chemicals has lost Rs 2,000 crore of its market capitalisation.
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