After weeks of attempting to hang onto power in key Tata Group companies, Cyrus Mistry appears to be throwing in the towel.
Late today (Dec. 19), the former chairman of Tata Sons, the holding company of the Tata Group, said that he would be resigning from the boards of a half-dozen listed companies affiliated with the group. But he also suggested he may now take the matter to court.
“… [I]t is time to shift gears, up the momentum, and be more incisive in securing the best interests of the Tata group,”Mistry said in a two-page statement. “… I have decided to shift this campaign to a larger platform and also one where the rule of law and equity is upheld.”
“… I had initially not thought that one would need to seek an external forum to adjudicate issues that should never have arisen in the first place,” he added.
The move comes at the beginning of a week when four major group companies—Indian Hotels, Tata Steel, Tata Motors, and Tata Chemicals—will be holding extraordinary general meetings (special sessions that include ordinary shareholders) to seek the removal of Mistry from their respective boards
The entire drama began after the Tata Group unceremoniously sacked Mistry as chairman of the group on Oct. 24, without citing any reason. A few days later, Mistry, in a letter leaked to the media, questioned the $104 billion conglomerate’s corporate governance practices and said that the group’s net worth had eroded significantly, leading to a write-off of $18 billion.
Weeks later, the Tata Group finally issued a statement indicating that Mistry’s sacking was related to his inability to turn around the group’s fortunes and his decisions to sell badly performing assets. Since then, both camps have been engaged in a public airing of allegations and counter-allegations.
Mistry, meanwhile, refused to resign from his role as a director on various group companies, and remained chairman at four group companies. They included the publicly listed firms Tata Motors, Tata Power, Tata Chemicals, and the Indian Hotels.
To remove him as chairman and director on various group companies, the Tata Group had called for special sessions through December. Last week, the first of the lot, Tata Industries, removed him as director, followed immediately by Tata Consultancy Services.
With Mistry’s decision to resign from six more Tata companies, both the former chairman and the Tata Group will perhaps avoid more needless mudslinging.
But what will Mistry do next? The mystery continues.