A year after Cyrus Mistry was fired from his post as the Tata Group chairman, a former company executive has now posted the graphic details on the circumstances under which the former’s sacking took place.
Nirmalya Kumar, who was group executive council (GEC) member under Cyrus Mistry, has written a blog outlining how the former Tata Sons Chairman was sacked from his job.
Mistry was unceremoniously sacked from the company last October. Kumar writes that before his sacking was formalised, Mistry was given an option of a graceful exit through resignation. The decision to sack him or face resolution ‘for his removal at the upcoming board meeting” was communicated to Mystry by none other than Ratan Tata himself along with Tata Sons board member Nitin Nohria in Bombay House 4th floor office.
Here’s what Kumar writes;
On 24 October 2016, Cyrus was in his Bombay House 4th floor office examining what seemed like a routine agenda for the Tata Sons board meeting that was scheduled to start in five minutes at 14:00 hours. Through the grapevine, Cyrus had heard that some of the board members had an unscheduled informal meeting earlier that morning. However, what they had discussed was unknown, and as such, he did not give it much further thought. The previous week had been business as usual with trips to China and Singapore to meet partners and investors.
A knock on the door, and to his surprise, enter his predecessor, Ratan Tata and Tata Sons board member Nitin Nohria. Cyrus welcomes them and asks them to take the two chairs opposite him. Nitin Nohria begins by proclaiming that “Cyrus as you know the relationship between you and Ratan Tata has not been working.” Therefore, Nohria continues, Tata Trusts have decided to move a board resolution removing Cyrus as Chairman of Tata Sons. He is offered the option of resigning or facing the resolution for his removal at the upcoming board meeting. Ratan Tata chimes in at this stage to say he is sorry that things have reached this stage.
Cyrus Mistry calmly responds with gentlemen you are free to take it up at the board meeting and I will do what I have to do. Nitin Nohria and Ratan Tata exit the room and walk over to the other end of the hallowed 4th floor of Bombay House, where the board room is located. Cyrus, sends a text “I am being sacked” to his wife Rohiqa, before putting on his jacket and heading to the Board Room.
THE BOARD MEETING
Cyrus takes his place on the chairman’s seat, a chair that is slightly elevated and larger compared to the other chairs in the room. Mistry welcomes Ratan Tata (who had never attended a board meeting since Cyrus had become Chairman) to the meeting and informs the board that Ratan Tata and Nitin Nohria have something to share prior to considering the previously circulated agenda.
Nohria, a Tata Trust nominee and Dean of Harvard Business School, advises the board that the Tata Trusts have asked its nominees to propose a motion to the Board of Tata Sons. Amit Chandra, another Tata Trust nominee, apprises the board that at a meeting of the Trust Directors held earlier in the day it was agreed to move a motion to request Mistry to step down as Executive Chairman of Tata Sons because the Trusts had lost confidence in him for a variety of reasons. No rationale for the decision beyond this declaration was shared.
In response, Cyrus argued that the articles of association required a 15-day notice before taking up such an item for the consideration of the Board, and as such, the present action was illegal. Amit Chandra informed the board that the legal opinion obtained by the Trusts stated such a notice was not necessary. He offered to share the opinion, but none has been to date. Instead, he proposed Vijay Singh to be elected as the Chair for the remainder of the Board Meeting. Despite repeated protests by Cyrus on the illegality of events, Venu Srinivasan seconded the proposal. Ishaat Hussain and Farida Khambata said they would abstain on this motion to replace Mistry with Singh as Chair of the meeting.
Quickly, a vote was taken with six members (Ajay Piramal, Amit Chandra, Nitin Nohria, Ronen Sen, Venu Srinivasan, Vijay Singh) voting for, while Farida Khambata and Ishaat Hussain abstained. Vijay Singh was installed as Chair for the meeting.
Venu Srinivasan then proposed the inclusion of additional matters on the Agenda by moving the Resolution below, which was seconded by Ronen Sen:
Read the full blog here: