Cyrus Mistry was ousted in October as chairman of Tata Sons, which has 73.76 per cent stake in TCS.
Shareholders of Tata Consultancy Services or TCS have voted to remove Cyrus Mistry as director at an extraordinary general meeting or EGM. 93.11 per cent of shareholders voted for his ouster. At TCS, in which the group's holding company Tata Sons has 73.76 per cent stake, that result was expected. But five more listed Tata companies will vote on the resolution to remove Mr Mistry from their boards in EGMs over the next two weeks. Tata Sons does not hold a majority in any of these and will rely on other shareholders to oust Mr Mistry. TCS accounts for about 40 per cent of the Tata group's profits and 70 per cent of its Market cap.
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Cyrus Mistry did not attend the TCS meeting today and his vacant seat was conspicuous. Eleven directors were present as was Ratan Tata who has taken over as interim chairman of the Tata group till a replacement is found for Mr Mistry, who was sacked in October.
A letter was read out on Cyrus Mistry's behalf in which he described as a "foregone conclusion," his removal from the TCS board. "Good governance was thrown to the wind and replaced by whims, fancies and personal agenda...I am fighting to save the soul of Tata Group," Mr Mistry wrote.
Ahead of the meeting, the entire TCS board, including independent directors, endorsed the Tata resolution to remove Mr Mistry, who was ousted as TCS chairman last month. Ishaat Hussain, who was made interim Chairman, recused himself from conducting the meet.
When Cyrus Mistry was ousted in October as chairman of Tata Sons and so the whole $100-billion conglomerate, he remained on the board of some group companies and has made no move to oblige the Tatas by quitting. Global proxy advisory firm ISS has supported Mr Mistry and has asked shareholders to vote against the move to remove him as director of TCS and other large group companies.
Indian Hotels will hold an EGM on December 20, Tata Steel on December 21, Tata Motors on December 22, Tata Chemicals on December 23) and Tata Power on December 26. Tata Sons does not have a majority stake in these companies and Mr Mistry has a chance of staging a coup with the help of non-promoter shareholders.
Market observers said the voting pattern of the non-promoter group at the TCS meeting would signal the level of support Mr Mistry has from shareholders in general, which could also set the tone for the other EGMs. Mr Mistry was removed as director at an EGM of Tata Industries on Monday.
In a war of words ahead of the EGMs, Tata Sons has said Cyrus Mistry must be removed from company boards as his presence "is likely to lead to fragmentation of the Tata Group". It said Mr Mistry misled the selection committee set up in 2011 to choose a chairman for Tata Sons to succeed Ratan Tata, alleging that he had made lofty statements about his plans for the Tata Group, none of which were implemented.
The group has said that Mr Mistry was removed as chairman because the board of Tata Sons had lost confidence in him and his ability to lead the group. It has alleged that in his four-year tenure, Mr Mistry concentrated power and authority as chairman in all major Tata operating companies and tried to weaken management structures in Tata companies "acting contrary to his fiduciary duties".
Mr Mistry has denied all allegations and said he was pushed to being a "lame duck chairman," with "alternate power centres" operating in the Tata Group, a reference to Ratan Tata, who he has continuously attacked since his ouster.
At their EGMs, Tata Motors, Tata Steel and Tata Chemicals, shareholders will also be voting for a resolution to remove business tycoon Nusli Wadia, who has supported Cyrus Mistry, as independent director. Mr Wadia has written a 15-page letter attacking Tata Sons for seeking his removal, saying he has been targeted for his "independence of mind and action."