Tata Motors director alleges governance lapses by parent Tata Sons
- Author: Ronnie Bowen Dec 16, 2016,
Dec 16, 2016, 0:47
Shareholders of Tata Teleservices voted out Cyrus Mistry as a director of the telecom company, dealing the third successive blow to the former head of the Tata Group who has already been ousted from Tata Industries and Tata Consultancy Services.
An ordinary resolution was "passed unanimously" at the extraordinary general meeting (EGM) of the company, as a result of which Cyrus P Mistry has ceased to be a director and consequently chairman of the company with immediate effect, Tata Teleservices said.
The ouster comes a day after more than 93 percent shareholders of TCS voted to remove Cyrus Mistry as a director of the company in an EGM which was held on Tuesday.
Mistry in his letter to the Board last month had said that the business was "continuously hemorrhaging" and had even questioned the alliance in his statements to the group.
"Tata Sons appears anxious about the Tata Motors EGM vote outcome", Ramesh Vaidyanathan, managing partner of law firm Advaya Legal in Mumbai, said by phone Wednesday. Promoters hold 73% of TCS shares.
Out of the 8.78 crore retail shareholders, 1.55 crore voted on the resolution, 78 per cent, or 1.21 crore of which voting against the resolution. "A reported 78 per cent of the votes cast by retail investors was against the resolution to remove me and almost 43 per cent of the votes cast by institutional investors were against the resolution to remove me".
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He also denied allegations that his "actions may put Tata Motors and its future in grave jeopardy and impact the overall morale of the workers, employees and management who have joined a Tata company", saying it was "false and untrue and is conjecture".
The promoters Tata Sons and NTT Docomo owns 36.17% and 26.5 % respectively which makes it a total of 62.67 %.
Of the 43.79 crore institutional holding, 56.69 per cent participated in the poll, with 14.25 crore favouring Mistry's removal and 10.55 crore being against the resolution.
TCS was the second company to remove Mistry after Tata Industries did so on Monday. For instance, the public owns 67% of all Tata Motors' shares, which is perhaps why Tata Sons has been trying to beef up its shareholding in India's largest auto company.
Docomo exited Tata Teleservices due to financial struggles started by the latter.
Docomo filed for worldwide arbitration and won an award of $1.17 billion.