 "S Padmanabhan, Tata Sons")
In a curious development, the Tata Power board met on Friday to appoint S Padmanabhan, head of group HR of Tata Sons, as an additional director, without withdrawing Cyrus Mistry’s nomination as chairman.
Ahead of the December 26 extraordinary general meeting (EGM) of Tata Power, where promoters hold 33 per cent stake, it was necessary to induct a “suitable person” on the board for him to take over as interim chairman, replacing Mistry, in case Tatas win the vote, a source said.
Padmanabhan, an old Tata hand, is likely to be named the interim chairman of Tata Power, if Mistry is voted out at the EGM as director on December 26, it is learnt.
Who then will chair the EGM? While Mistry remains the chairman, he would recuse himself from chairing that meeting, as the only agenda of the EGM would be to seek his ouster as director of the company.
The board has decided that an independent director of Tata Power would chair the EGM.
Sources indicated that Nawshir H Mirza, an independent director who’s known for his involvement in corporate governance and has spoken against Mistry’s removal as Tata Sons chairman, may chair the crucial EGM of December 26.
Indian Hotels, Tata Motors, and Tata Chemicals, are the other three group companies where Mistry remains the chairman. “But those boards possibly have independent directors, who are considered suitable to take over as interim chairman, when the need arises after their respective EGMs seeking to oust Mistry as director,” according to a source. In the case of Tata Power, that was not the case, the source added. Indian Hotels EGM is slated for December 20, Tata Motors on December 22 and Tata Chemicals on December 23. At all those EGMs, independent directors will chair the meetings.
The 12-member Tata Power board has several directors, who are backing Mistry in the ongoing corporate war with Ratan Tata. Directors, including Homiar S Vachha, former top executive at ICICI, Anjali Bansal, senior advisor to private equity player TPG, Vibha Padalkar, a senior HDFC executive, and Sanjay Bhandarkar, former managing director of Rothschild India — the latter three hired days before Mistry was removed as chairman of Tata Sons — are all believed to be backing Mistry. The other independent directors on Tata Power board are Deepak M Satwalekar, former top executive at HDFC, and Ashok Basu, former steel and power secretary. The Tata Power board also has five more directors including Mistry - Pravin Kutumbe, an LIC nominee, Sandhya S Kudtarkar, a Tata Group employee, Anil Sardana, chief executive officer and managing director of Tata Power, and Ashok S Sethi, chief operating officer and executive director of Tata Power.
Earlier, Ishaat Hussain was named the interim chairman of Tata Consultancy Services much ahead of its EGM on December 13. Even so, independent director, Aman Mehta chaired the meeting. At Tata Global Beverages, the board had ousted Mistry with seven directors voting for his removal and three against and had appointed Harish Bhat as chairman. But the process of his removal was challenged by Mistry. O P Bhatt was appointed chairman of Tata Steel by the board in place of Mistry.
The Tata Group shares have lost Rs 80,000 crore of market capitalisation since Mistry was ousted on October 24 as Tata Sons chairman. Tata Power shares have lost Rs 2,000 crore, or 8.5 per cent, of market value.
In an unrelated development, the Tata Group has clarified that Tata, interim chairman of Tata Sons has no plans to step down from the chairmanship of the Tata Trusts at this point in time. The group was responding to media reports on the subject.
