Independent directors of The Indian Hotels Company Ltd on Friday expressed full confidence in Cyrus Mistry as the Chairman of the hospitality firm, in seeming defiance of the move by Ratan Tata and Tata Sons to get Mistry to step down as the head of all Tata companies.
“Taking into account board assessments and performance evaluations carried out over the years, the independent directors unanimously expressed their full confidence in Chairman Cyrus Mistry and praised the steps taken by him in providing strategic direction and leadership to the company,” Indian Hotels said in a statement to the stock exchanges after a board meeting chaired by Mistry.
This is a clear indication of a split in the Tata empire over the manner in which Mistry was ousted from the Chairmanship of Tata Sons. It also signals that Mistry could stay on as Chairman of various group companies, including Tata Motors, Tata Steel, TCS and Tata Power. The independent directors of these companies are to meet next week to decide their stand on Mistry. “It is a unique situation: Mistry has been removed as Chairman of Tata Sons, but he continues as the head of group companies. It sends a conflicting signal to stakeholders,” a minority shareholder of Indian Hotels told
According to sources close to the development, the companies will soon call an EGM to take shareholders’ approval on the way forward. Sources close to the Tata camp said all options, including legal, are being explored to get Mistry out of the group companies.
Indian Hotels’ 10-member board has six independent directors: KB Dadiseth, Ireena Vittal, Vibha Paul Rishi, Deepak Parekh, Nadir Godrej and Gautam Banerjee. The others are Cyrus Mistry, his brother Shapoor Mistry, Managing Director Rakesh Sarna, and executive director Mehernosh Kapadia.
Meanwhile, the turmoil inside the boardroom spilt on to the streets: photojournalists outside Bombay House, the headquarters of Tata Sons, were beaten up by security guards. The company later apologised.