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Ousted Tata chairman tried for balanced corporate governance - statement

November 13, 2016 at 10:12 am EST

MUMBAI (Reuters) - Ousted Tata Sons chairman Cyrus Mistry had tried to form a corporate governance framework that balanced the interests of the promoter and shareholders without impinging on the independence of group companies, according to a statement issued by his office on Sunday.

The statement comes days after a Tata Sons statement that said Mistry, with the help of independent directors, was trying to take over Indian Hotels Co (>> Indian Hotels Company Ltd), which owns the Taj chain of hotels, when he was heading the $100 billion steel-to-software conglomerate.

Mistry's statement said it was unfortunate to question the independence of the directors given that they were well-known names in the Indian business fraternity.

The independent directors on the Indian Hotels board include Deepak Parekh, chairman of Indian mortgage lender HDFC Ltd (>> Housing Development Finance Corp Ltd) and Nusli Wadia, chairman of the Wadia Group, a textiles-to-aviation conglomerate.

He added that six out of nine independent directors were appointed during his predecessor Ratan Tata's tenure.

In a boardroom battle last month Mistry was ousted as chairman of Tata Sons, with patriarch Ratan Tata back at the helm temporarily. A bitter public spat has since ensued between the two sides. [For a take a look: nL4N1DC44J]

While Tata Sons pins Mistry's removal on his performance, a breach of trust and several other factors, Mistry in an earlier letter blamed Ratan Tata for some of the legacy issues the group faces and highlighted corporate governance failures at some operating companies.

Mistry in the statement on Sunday said the strategy of individual group companies should be created by their own management and approved by their own board of directors.

This would allow the independent directors to ensure the rights of minority shareholders were in sync with that company's business model, Mistry said.

Separately, Tata Sons in a release reiterated that it was "crucially important" for board members including independent directors to consider that their views should ensure that the future of Tata companies and all its stakeholders is protected.

Tata Sons has called shareholder meetings at group companies including Tata Motors (>> Tata Motors Limited), Tata Steel (>> Tata Steel Limited), Indian Hotels, Tata Consultancy Services (>> Tata Consultancy Services Limited) and Tata Chemicals to vote Mistry off those businesses.

(Editing by Jane Merriman and Dale Hudson)

By Aditi Shah and Suvashree Choudhury

Stocks treated in this article : Tata Motors Limited, Tata Steel Limited, Tata Chemicals Limited, Indian Hotels Company Ltd, Tata Consultancy Services Limited, Housing Development Finance Corp Ltd

Stocks mentioned in the article

Add to a list Add to a list 0 selected To use this feature you must be a member Log in Sign up	Price	Change	5d. change	Capi.
TATA MOTORS LIMITED	999.5 INR	-0.17%	+3.77%	44.03B
TATA STEEL LIMITED	165.8 INR	-1.13%	+2.28%	25.12B
TATA CHEMICALS LIMITED	1,122 INR	+0.83%	+1.65%	3.4B
THE INDIAN HOTELS COMPANY LIMITED	569 INR	-1.44%	-4.71%	9.86B
TATA CONSULTANCY SERVICES LTD.	3,821 INR	-0.80%	-0.13%	167B
HOUSING DEVELOPMENT FINANCE CORPORATION LIMITED	2,724 INR	-0.84%	-2.56%	60.67B
LINE CORPORATION	5,350 JPY	-.--%	-0.19%	12.52B

Ratan Naval Tata

Ratan Tata is at the head of Tata Group, a conglomerate of hundreds of subsidiaries among these Tata steel, the fourth largest steel company in the world, Tata Motors and Tata Telecom.

He graduated from Cornell University in New York; Ratan declined a proposal from IBM to join the Tata group. He began his career in steel branch of the group, where he stayed until 1971, where he was appointed Director of National Radio & Electronics Company (NELCO), company of the Tata group. In that period the company had met many difficulties, and then he bet on a new technology. In four years, the market share of Nelco rose to 20% from 2%, but this success will be very short.

In 1975 Indira Gandhi was Prime Minister, recession hit the country, the business suffered and social movements paralyzed Nelco’s production. The crisis will be strong as Nelco is forced to close.

In 1977 Ratan was in charge of the textile factory of the group, but the latter still using old technologies and suffered the competition of new factories. Ratan proposed to start a modernize process but the group didn’t give to him a financial support. In 1985, the factory closed.

In 1986 he was appointed chairman of Tata industries, before becoming in 1991 the CEO of Tata group. He began a restructuring process in order to draw seven areas of activity, in add he invited the old managers to leave the place in benefit to younger people.

In 2000 Tata bought Tetley Tea, English tea maker, this is the start of construction of the Tata empire.

In 2007, Tata acquired for $2.6 billion the anglo-dutch group Corus, specialist in steel and aluminium, and his group became the fourth largest steel producer in the world.

In March 2008, he bought two historic brands in the automobile sector, Land Rover and Jaguar for $2.3 billion, and he became the boss of 16000 UK employees. In late 2008, the automotive industry crisis brings down the manufactures’ profits nearly 30%, for this reason Tata decides to ask to Brown’s government to save Tata motors, and he requires a bill out of one billion dollars.

Tata group, it counts now 98 subsidiaries, 300 000 employees and 3.2% of Indian GFP.

In June 2011, the market capitalization of Tata group reached 4.32 trillion rupees, or $87 billion, and it is the first Indian group.

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Linked companies
Tata Teleservices Ltd. Tata Teleservices Ltd. Wireless TelecommunicationsCommunications Tata Teleservices Ltd. provides telecommunications services. It services include mobile services, wireless desktop phones, public booth telephony and wireline data services. The firm also provides Wi-Fi internet services, three-way conferencing and post-paid internet services. Tata Teleservices was founded by Ratan Naval Tata in 1996 and is headquartered in Mumbai, India.	Chairman
Sir Ratan Tata Trust	Chairman

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