An overwhelming 93.11% of shareholders of Tata Consultancy Services voted in support of Cyrus Mistry’s removal as the firm’s director on Tuesday. At an Extraordinary General Meeting, which the ousted Tata Sons chairperson skipped, 6.89% of them voted against stripping him of directorship.
Independent director Aman Mehta chaired the EGM proceedings after interim TCS chairperson Ishaat Hussain recused himself from conducting it. Mehta began the 150-minute-long meeting, saying Mistry’s removal from the post of TCS director would be in the best of interest of the consultancy firm. “The real issue in TCS is that Mistry has lost the promoters’ trust and confidence,” he said.
While many shareholders spoke in favour of ousting Mistry from the board, some questioned the step. “The group’s 149-year-old legacy is getting destroyed in this fight,” said Ashalata Maheshwari, a long-time shareholder. Those for stripping Mistry’s directorship at TCS gave reasons such as the need for a ‘Tata’ to continue at the head of the group, whereas others against it said the companies under the conglomerate had functioned better under him, PTI reported.
In a letter to shareholders, sent about an hour before the EGM, Mistry had said he was “fighting to save the soul of the Tata Group”. “Good governance has been thrown to the wind and replaced by whims, fancies and personal agenda. With Tata Sons holding 73% in TCS, the outcome of the resolution seeking my removal as director is a foregone conclusion,” he said in the note.
On Monday, Mistry was removed as the director of Tata Industries after an EGM, which Tata Sons had called for at the companies where Mistry still serves as a board member to remove him from the position. Ishaat Hussain had replaced Mistry as the TCS chairman on November 10.
Earlier, the conglomerate had told its shareholders that the group might break up if Mistry continued to remain the head of its member companies. Mistry was appointed to the board of the companies only because he was the chairman of Tata Sons, the company claimed in a statement. It also said that it was necessary for him to step down from his post in the group’s firms after his dismissal as chairperson.
Both sides have accused the other of wrongdoing in company matters. On Sunday, the holding company alleged that Mistry had misled the 2011 selection committee set up to appoint Ratan Tata’s successor, saying he had taken advantage of his position to “systematically” dilute the representation of Tata Trusts on the boards of group companies.
However, Mistry levelled counter-accusations against the group, claiming that investigations into AirAsia’s accounts had revealed fraudulent transactions worth Rs 22 crore, after which the Enforcement Directorate filed a case against the airline. Mistry, who was removed from his position on October 24, had also accused the Tata Sons board of “wrongful dismissal”, adding that they faced $18 billion (Rs 1.15 lakh crore approximately) in write downs or reduction in value of assets.