Former Tata Group chairman Cyrus Mistry was handed yet another setback late on Tuesday evening when Tata Consultancy Services (TCS) voted to remove him as director of the company. An overwhelming number of shareholders attending the extraordinary general meeting (EGM) to decide on Mistry’s fate decided to vote against him, barely hours after he was ousted as chairman of Tata Industries.
The Tata Sons board, in a surprise move, had ousted Mistry as Tata Group chairman on October 24 and appointed Ratan Tata as its interim chairman. Since then, ugly spats have surfaced between the former chairman and the group’s companies over issues of control in various firms. Mistry has also been removed from various posts of companies within the group since then, with more ousters slated to follow.
Odds were stacked against Mistry
Going into the EGM, Mistry had the odds stacked against him. Although global proxy advisory firm Institutional Shareholders Services Inc (ISS) had recommended the minority shareholders of TCS — the country’s largest IT exporter — to vote against the resolution seeking ouster of Cyrus Mistry as its director, the general direction of the wind was in the other direction.
Mistry himself had tried to sway the vote in his favour, telling the TCS shareholders before the EGM: “The future of TCS hinges on good governance and ethical practices. That can flow only from the promoter. It needs to permeate into the board and the management.”
He added: “In the past weeks, we saw good governance being thrown to the wind in every sense of the term. I call on you to vote with your conscience and send a signal that catalyses a larger discussion on governance reform.”
At the meeting
Mistry himself did not attend the EGM, which was held in Mumbai on Wednesday. However, his efforts and the urging of ISS seemed to have spurred on some shareholders to question Mistry’s ouster, as the resolution to remove him as director was discussed.
However, the discussion seemed moot at the end, with an overwhelming 93.11 percent of the shareholders voting to remove Mistry as chairman of TCS. The remaining 6.89 percent voted against it.
