...but stays on as Tata Chem chief with independent directors’ backing

The goings-on in the Tata Group companies’ boardrooms turned curiouser on Thursday, with the independent directors of Tata Chemicals reposing their faith in the leadership of Cyrus Mistry after evaluating his performance over the past two financial years.

Tata Chemicals thus became the second Tata company where resistance is building up to the Tata Sons’ move to ease Mistry out of all group companies, following up on his dismissal as Chairman of the holding company.

Last week, shareholder directors of Indian Hotels, another Tata Group company, had similarly backed Mistry’s leadership.

The board of Tata Chemicals met on Thursday to assess the impact of recent developments as a few foreign portfolio investors have raised concerns.

The independent directors of Tata Chemicals reaffirmed their trust in Mistry after an assessment and evaluation of his decisions made in the previous board meetings.

“Considering all the facts, the independent directors unanimously affirmed their confidence in the board, its chairman and the management in the conduct of Tata Chemicals business,” the company said in a statement to the stock exchanges.

The shareholder directors’ assessment becomes significant as the promoter holds just over 30 per cent stake in Tata Chemicals, and any move to replace Mistry as Chairman of the company will require shareholders’ approval.

Mistry has taken some hard decisions in recent years to bring down debt levels and exit businesses that have little scope to turn profitable in the short term. The company sold its urea plant at Babrala in Uttar Pradesh to Norway-based Yara International for ₹2,670 crore. The urea business, with a turnover of ₹2,301 crore in financial year ended March 31, 2016, accounted for 21 per cent of total turnover.

Tata Chemicals’ net profit in the September quarter was up marginally at ₹293 crore (₹292 crore) due to margin constraints in various businesses. Net sales were down 17 per cent at ₹3,496 crore (₹4,213 crore).

Shares of the company were up 2 per cent at ₹506 on Thursday.