Mistry's conduct caused harm to TCS, stakeholders: Tata Sons

Upping the ante, Tata Sons today accused estranged chairman Cyrus Mistry of causing "enormous harm" to Tata Consultancy Services (TCS) by his conduct and sought his removal from the company's board.

In a notice to shareholders seeking his removal, circulated by India's largest software exporter, its main promoter Tata Sons said Mistry has "lost confidence".

Tata Sons, also a holding company of the USD 103-billion Tata Group, cited benefits accruing to TCS from use of 'Tata' brand by Ratan Tata-led Tata Sons to back its recommendation for Mistry's removal.

Within weeks of Ratan Tata replacing Mistry as Chairman of the holding company of the group, Tata Sons by virtue of its commanding 73.26 per cent stake in TCS removed him as the chairman. It also asked the company to convene an extraordinary general meeting (EGM) of shareholders to consider removing him as a director on the board.
 

At its board meeting last week, which was not attended by Mistry, TCS decided to call an EGM on December 13.

The notice said, "Subsequent to his replacement as Executive Chairman of Tata Sons Ltd (TSL), Mistry has made certain unsubstantiated allegations, which cast aspersions not only on TSL and its board of directors, but also on the Tata group as a whole, of which TCS is an integral part."

Stating that the communication marked as confidential "was made public", it added, "Mistry's conduct has caused enormous harm to the Tata Group, TCS and its stakeholders, including employees and shareholders."

The move by Tata Sons to replace Mistry with group veteran Ishaat Hussain as chairman of TCS was seen as an attempt by Ratan Tata-led promoter group to tighten grip over the salt- to-software conglomerate.

"The board of directors of the company is in agreement with... The removal of Cyrus P Mistry as director of the company, as the same would be in the best interests of the company," the notice said.

"The board of directors of Tata Sons, the holding company of the Tata Group, has "lost confidence in Cyrus P Mistry to lead Tata Sons for a combination of several factors," it said, adding that Tata Sons on October 24 decided to replace him as the removal "was absolutely necessary for the future success of the Tata Group".