 "Cyrus Mistry and Ratan Tata")
Talks between the Tata group and former Tata Sons chairman Cyrus Mistry have begun with noted lawyer Darius Khambata as a mediator. According to sources, Tatas want to convince Mistry to quit from all Tata group companies, without any acrimony or public debate.
Khambata, former advocate general of Maharashtra, is a trustee on Tata Trusts board. He is also respected by both the camps.
The mediation would help the two sides in working out a plan which would not sully their image. A corporate lawyer close to the development said if Mistry does not quit, then each board of the Tata group companies will have to meet separately and move a resolution to sack Mistry as the chairman of the respective companies.
However, Mistry can continue to be on the boards of these companies as director till a shareholders’ general meeting is called where the directors are appointed or removed. “With the mediation, the separation from each company can be less messy and without any public glare,” said the source. The departure of Indian Hotels’ former chairman AB Kerkar was played out in full public view in the annual general meeting during the 90s when both Tata and Kerkar camps fought bitterly in front of shareholders. “This is something the Tatas want to avoid,” the source said. “The ball is now in Mistry’s court. He has to take a call on how he will leave,” a source said.
However, Mistry can continue to be on the boards of these companies as director till a shareholders’ general meeting is called where the directors are appointed or removed. “With the mediation, the separation from each company can be less messy and without any public glare,” said the source. The departure of Indian Hotels’ former chairman AB Kerkar was played out in full public view in the annual general meeting during the 90s when both Tata and Kerkar camps fought bitterly in front of shareholders. “This is something the Tatas want to avoid,” the source said. “The ball is now in Mistry’s court. He has to take a call on how he will leave,” a source said.
Soon after Mistry’s departure, both Mistry and Tata camps have accused each other of lack of corporate governance and underperformance. A letter by Mistry to Tata Sons directors and Tata Trust directors, which was leaked to the media, warned that Tata group companies could see $18-billion write downs because of bad acquisitions by Ratan Tata during chairmanship. In its response, the Tata group said they have taken all write downs as per the accounting standards of India.
Meanwhile, three top officials appointed by Mistry — Madhu Kannan, Nirmalya Kumar and NS Rajan — have resigned, top sources said. Kannan joined the Tata group in May 2012 and was the group head for business development and public affairs at Tata Sons while Kumar was the member of the Group Executive Council and was responsible for strategy at the group level. Rajan was head of human resources at the group and was member of the GEC that was disbanded right after Mistry’s departure from Tata Sons board on Monday. The departure of the three key people was a foregone conclusion as the Vision 2025 prepared by Kumar has been shelved by the board. A Tata group source said the Vision 2025 prepared by Kumar was as good as “trash”.
