After a bitter battle against Ratan Tata, ousted Tata Group Chairman Cyrus Mistry quit from the boards of six listed companies, including Tata Motors and Indian Hotels and vowed to shift his fight to a "larger platform".
In a statement, Mistry said the objective of effective reform and best interests of employees, shareholders and other stakeholders of the Tata Group "would be better served by moving away from the forum of the extraordinary general meetings".
Mistry, 48, has not resigned from Tata Sons, where he still continues as a director despite being removed as chairman, or from the operating firms. Tata Sons, the holding company of the $103 billion group, has called extraordinary general meeting (EGMs) of listed companies to consider its proposal to remove Mistry as director on their board. "In order to be more effective, serve the objective of governance reform, and to regain lost ethical ground, I have decided to shift from the forum of the EGMs to a larger platform and also one where the rule of law and equity is upheld," Mistry has said in the statement.
LIC to abstain from voting
Meanwhile, state insurer Life Insurance Corporation of India's decision to abstain from voting on a resolution to oust Mistry from the Tata Consultancy Services board may be an indication of the manner in which the ball has fallen in Tata Sons' court.
Choosing a hands-off approach, LIC has eased the way for the Tatas to wrest a simple majority on resolutions needed to axe Mistry from company boards. Sources said LIC has already sounded the department of financial services under the ministry of finance on the matter and has obtained the government's views.
The Centre had already made it clear that financial institutions will take decisions based on "what is good for their business" and will not be swayed by any other factor. "LIC takes a stand only if the investment is seen to be in jeopardy," said former LIC chairman A K Shukla. "It is not that the management and LIC have not had differences. But in cases where institutions did not agree with the management the proposals probably did not come for vote," he added.
No plans to step down as chairman of Tata Trusts, Ratan Tata
Ratan Tata, interim chairman of Tata Sons, said that contrary to media reports, he has no plans to step down as chairman of Tata Trusts "at this point in time." Tata Trusts, which control 66% in Tata Sons, is the holding company of the $108-billion Tata Group. Tata said the Trusts are undertaking many initiatives that had "national impact and he is looking forward to continuing his involvement with these initiatives" in the Trusts."He was, however, keen that a process should be in place for a smooth succession at an appropriate time," said a press release from Tata Sons.
