Tata Sons on Friday moved resolution to have both Cyrus Mistry and Nusli Wadia removed as directors of Tata Chemicals, Tata Steel and Tata Motors. The decision was made following a Tata Chemicals’ board meeting on Friday, at which Wadia and a few other independent directors supported Mistry as the chairman of the board, Mint reported.
The three operating companies of the Tata Group made three separate filings to the stock exchanges on Friday. “It [the resolution] is in the interest of all the stakeholders,” an unidentified Tata Group official said. “Discord between the promoter and directors of the operating companies is a recipe for disaster.”
The group holding company controls 19.35% of Tata Chemicals, 26.51% of Tata Motors and 29.75% of Tata Steel. Moreover, a non-executive and non-independent director on the board of Tata Chemicals, Bhaskar Bhat, resigned on Friday.
Tata Sons sent notices to the three companies to have Wadia removed from their boards, directing them to call extraordinary general meetings to decide on his directorship, according to The Times of India. To remove the 72-year-old from the position, Tata Sons needs support from the majority of the shareholders of these companies. Wadia, who is the chairman of Bombay Dyeing and Britannia Industries, has been an independent director of Tata Chemicals since June 1981, Tata Steel since August 2005 and Tata Motors since December 1998.
The decision to remove Wadia from the boards comes amid the spat between the Tatas and Mistry, who was ousted as the chairman of Tata Sons on October 24. On Thursday, he was replaced as the chairman of Tata Consultancy Services, in which he holds majority stake, by Ishaat Hussain. The Tata Group has accused Mistry of being responsible for its dwindling revenue.
The group had also filed caveats as a preventive measure, “fearing legal action” by Mistry, who was appointed the chairman of the conglomerate in 2012. His family’s Shapoorji Pallonji Group owns around one-fifth of Tata Sons. In a letter to his employees, Ratan Tata had said the decision, which has thrown the $103-billion conglomerate into turmoil, was “absolutely necessary” for the group’s success.