The Indian Panorama

Tag: Cyrus Mistry

  • Tata Steel sacks Cyrus Mistry, names OP Bhatt as chairman

    Tata Steel sacks Cyrus Mistry, names OP Bhatt as chairman

    MUMBAI (TIP): The Tata Steel board on Nov 25 replaced Cyrus Mistry with OP Bhatt, an independent director, as the company’s chairman with a majority of the members voting in favour of the resolution. The 110-year-old metal giant’s decision is a fallout of the parent Tata Sons ousting Mistry as its chairman last month.

    However, Mistry remains a director of Tata Steel. The company said Bhatt, who has been on its board for the last three years, will be the chairman till the outcome of the extraordinary general meeting (EGM) called on December 21 to remove Mistry as director.

    The Mistry camp slammed the latest move as yet “another example of the unprecedented erosion in core Tata values”, which has seriously dented the most respected Indian corporate brand.

    Six directors supported the resolution seeking Mistry’s removal as chairman, while three opposed it. Mallika Srinivasan, Ishaat Hussain, Adrew Robb, Jacob Schraven, D K Mehrotra and Bhatt backed Mistry’s removal. Nusli Wadia, chairman of Britannia and Bombay Dyeing, Subodh Bhargava, chairman emeritus of Eicher Group, and Mistry himself opposed the resolution.

    Srinivasan is chairman of Tractor and Farm Equipment, while Hussain, who is on the board of Tata Sons, recently replaced Mistry as chairman at TCS. Robb is chairman of Tata Steel Europe, Schraven is ex-deputy chairman of Corus and Mehrotra is the former chief of Life Insurance Corporation. Of the six independent directors, four — Srinivasan, Bhatt, Robb and Schraven — backed Mistry’s removal.

    This was the second board meeting of Tata Steel after Mistry was removed as chairman of Tata Sons last month

    Tata Steel is the third listed group company that has replaced Mistry as chairman, after Tata Consultancy Services (TCS) and Tata Global Beverages. At TCS and Tata Global, group veterans Hussain and Harish Bhat were installed as chairman.

    Tata Steel said that the board took note of the leadership changes at Tata Sons and had received a special notice from the principal shareholder to convene an EGM to remove Mistry as its director. “In view of the current situation”, the board, through a

    “circular resolution dated November 25” passed by majority consent, decided to replace Mistry as chairman “with immediate effect”, Tata Steel said in a regulatory filing.

    Tata Steel said that the board appointed Bhatt as chairman keeping in mind principles of good corporate governance and to provide impartial leadership to the company in its preparation and conduct of the EGM.

    Mistry continues to be the chairman of four listed group companies — Tata Chemicals, Tata Motors, Indian Hotels and Tata Power. He is expected to chair the board meeting of Tata Power next week when the members gather to consider the company’s second quarterly earnings.

    Five Tata Group companies have fixed EGM dates to remove Mistry from their boards (see graph). Tata Global Beverages and Tata Power are yet to announce EGM dates.

    Three companies — Tata Steel, Tata Motors and Tata Chemicals — have also proposed the removal of Wadia, a long-time independent director, from their boards for not supporting Tata Sons in its move to oust Mistry from group companies.

  • Mistry avoids face-off, skips two Tata board meetings

    Mistry avoids face-off, skips two Tata board meetings

    Mumbai: Cyrus Mistry on Thursday skipped two crucial board meetings, of Tata Sons and Tata Consultancy Services (TCS), his first such absence since he was ousted as chairman from both companies.

    The board of directors of Tata Sons did not discuss issues linked to Mistry, Tata executives said. However, at the TCS meeting, which was chaired by Ishaat Hussain, it was decided that the company will convene an extraordinary meeting (EGM) on December 13 to remove Mistry as a director from its board. On November 10, Tata Sons had said Hussain will replace Mistry as TCS chairman.

    TCS is the first company from the Tata Group to fix the EGM date. In the next few weeks, boards of Tata Steel, Tata Motors, Indian Hotels and Tata Chemicals will also consider convening similar EGMs. Despite opposition from parent company Tata Sons, Mistry remains chairman in these four group firms. To remove Mistry from boards of listed Tata companies, a majority of shareholders have to agree. In Tata Motors, Indian Hotels and Tata Chemicals, independent directors have supported Mistry’s continuance as chairman while in Tata Steel, the six independent directors were divided for and against him. It remains to be seen how shareholders factor in the views of these directors.

    Mistry’s dismissal as Tata Sons chairman and attempts to remove him from other group companies has raised questions about governance practices at the Tata Group.

    “It’s (the TCS EGM) the most regrettable step by the Tatas and murder of corporate governance as till date they have not spelt out why Cyrus was replaced as chairman,” said Anil Singhvi, chairman, ICan Advisors. Singhvi wondered how directors who had come on board recently and were yet to acquaint themselves with the group’s businesses, had agreed to go along with the decision to replace Mistry. Singhvi’s reference was to Venu Srinivasan, Ajay Piramal and Amit Chandra who had joined Tata Sons months before Mistry’s removal.

    Barring Mistry, Thursday’s board meeting, which was Hussain’s first as chairman of TCS, was attended by all the directors with Ron Sommer and Clayton Christensen joining in via videoconference.

    After the TCS board meeting, Hussain and the company’s MD & CEO N Chandrasekaran attended the Tata Sons board meet chaired by Ratan Tata that lasted for nearly two hours. This was Chandrasekaran’s first board meet as a Tata Sons director. Source: TOI

  • SALE OF ASSETS, FALLING REVENUE WORRIED TATA TRUSTS, OLD TIMERS

    SALE OF ASSETS, FALLING REVENUE WORRIED TATA TRUSTS, OLD TIMERS

    NEW DELHI (TIP): The Tata Trusts were concerned over the falling revenues of the group since Cyrus Mistry took over the reins of the company and there was a growing divergence over values and ethics, people close to the Tata Group have revealed in interviews to a television channel.

    A day after the dramatic removal of Mistry, at least three people close to the Tata Group have spoken about the possible reasons for the dismissal of the former Tata Sons chairman.

    “Since Cyrus took over, there’s no formal link between trusts and Tata Group. The trusts are dependent for philanthropic activities on dividends on shares we hold. The performance of Tata Sons was becoming more and more dependent on just 2 cos — TCS & JLR,” V R Mehta, trustee at the Sir Dorabji Tata Trust, was quoted as saying by NDTV.

    “The trusts were concerned about falling revenue (since Mistry took over) — funds for charitable work were drying up. There’s been divergence since Mistry took over on values and ethics. The trusts’ concerns were a major factor in Cyrus’ removal. Probably, no choices were left,” Mehta was quoted as saying.

    Noted lawyer Harish Salve, who is a legal expert for the salt-to-software group, told NDTV that the “group felt its formidable international reputation was being compromised”. “I’m sure all the people concerned here know they are not fighting for a piece of land or property,” Salve was quoted as saying by the TV channel.

    He also said Mistry’s move to sell group assets to pare debt was also a factor which had worried Tata Group old timers. “Tata has a reputation for weathering storms,” Salve was quoted as saying by NDTV. He said Tata’s approach had been not to “ditch assets in difficult times….try to fix it before you dismantle”.

    Salve told the channel that the move to sell Tata Steel’s assets in UK was seen as reversing the acquisitions undertaken by Ratan Tata because when the group acquired those assets, “it was not just buying a business, it was buying into an institution”.

    The eminent lawyer said the decision to dismiss Mistry may not have been sudden and admitted that it had created some “bad blood”. “When it comes to governance of an institution, sometimes things don’t go right, there is hurt, there is disappointment, sometimes there is also a sense of humiliation,” Salve was quoted as saying by NDTV.

    Another eminent lawyer, Mohan Parasaran, who has advised the Tata Group on the Mistry issue, said Ratan Tata had met Mistry before the board meeting on Monday and had asked him to quit. “I was approached a month back and gave an opinion to them on this issue. I said the board was competent to appoint chairman following their articles of association. They will need to appoint a selection committee. But there’s no need of a selection committee for the removal. For that, a majority of directors is needed,” Parasaran was quoted as saying.

    “I was told that Ratan Tata and a board member came all the way from the US (Harvard Business School dean Nitin Nohria) to meet Cyrus to persuade him to step down. Mistry had his own views and refused — he is entitled to his views.”

  • TATA POWER BUYS PLANT FOR RS 3,000 CR

    TATA POWER BUYS PLANT FOR RS 3,000 CR

    MUMBAI (TIP): Tata Power, the power generator led by Cyrus Mistry, is buying a 540-megawatt (MW) thermal power plant in Maharashtra to ramp up capacity, highlighting how a lot of India’s recent merger and acquisition (M&A) deals are being driven by the power sector. Tata Power’s move comes close on the heels of JSW’s purchase of a 1,391-MW unit (from Jaypee), Adani’s acquisition of 1,200-MW and 600-MW plants (from Lanco and Avantha respectively) and GDF Suez’s deal for a 1,000-MW facility (from a Hyderabad-based infra company). Tata Power, part of the Tata business conglomerate, is acquiring the thermal-based power project from the promoters of IRB Infrastructure, which will increase its total capacity to 8,885 MW. It is learned that the Tata company has inked the deal for about $500 million (Rs 3,000 crore). However, it didn’t disclose the value of the proposed transaction.

  • Ambani, Birla, Premji share their vision of ‘Make in India’

    Ambani, Birla, Premji share their vision of ‘Make in India’

    At the star-studded launch of Prime Minister Narendra Modi’s ambitious programme, attended by the likes of Reliance Industries Chairman Mukesh Ambani, Tata Group chief Cyrus Mistry and Aditya Birla Group’s Kumar Mangalam Birla, industry leaders said job creation and high growth would be possible only if the manufacturing sector gets into a high growth trajectory. These factors will include the buildup of critical infrastructure across the country supported by stable policies, transparent and competitive tax and duty structure, efficient and time-bound administration through the use of egovernance, cost effective and reliable energy coupled with logistics, critical for the competitiveness of industry,” Mistry added. Pledging his support to the initiative, Ambani said in order to succeed in this campaign, it was important to be open to capital and expertise from all over the globe, and implementation of GST will make India one market and strengthen overall Make in India programme. Ambani, who announced that Reliance Industries would create 1.25 lakh jobs in the next 12-15 months, further said it was also important for villages to stay connected to be a part of growth story.

    ICICI Bank Managing Director and CEO Chanda Kochhar said the ‘Make in India’ programme would become the next growth driver for the country. “Quite clearly in manufacturing we have lot of catching up to do. We need manufacturing to put the economy into a higher growth trajectory and to create millions of jobs,” Birla said “We need an educated workforce of thinkers to meet ‘Make in India’ vision. True success of manufacturing lies in being able to service global markets, said Azim Premji, Chairman, Wipro.

  • TATA GROUP IS INDIA’S MOST VALUABLE BRAND: STUDY

    TATA GROUP IS INDIA’S MOST VALUABLE BRAND: STUDY

    NEW DELHI (TIP): The Tata group has retained its place as the country’s most valuable brand at $21 billion, while the total worth of top-100 Indian brands now stands at $92.6 billion, says a new study. State-run insurance behemoth LIC is ranked second with a brand value of$4.1 billion, followed by public sector bank SBI ($4 billion), Bharti Airtel ($3.8 billion) and Reliance ($3.5 billion).

    The brand value of Tata group has risen by $3 billion in the past one year, primarily led by its international diversification strategy and the flagship firm TCS, as per consulting firm Brand Finance India’s annual study. “Despite the fact that some divisions within the group have been underperforming, the brand should benefit from the recently outlined plans to invest$35 billion over the next three years and should go some way towards meeting the goal of the Tata chairman, Cyrus Mistry to be amongst the 25 most admired brands globally,” it said.

    Brand value has increased among the top 50 by 10 per cent compared to 2013 with brands such as Tata, Godrej, HCL, and L&T leading the way, said the Brand Finance India 100 list that was released on August 7. Banking firms fared the worst collectively with majority of brands losing value or remaining stagnant due to generally poor governance and weak credit controls especially at the government-owned institutions, Brand Finance said.

    State Bank of India has seen its value drop by ($1.9 billion) as poorer revenue forecasts and bad-loans dampened earnings, it said. HCL Technologies has seen an increase in brand value of 51 per cent by$649 million as its successful strategy has seen the brand win 50 transformational engagements with contract values of$5 billion in the past year distributed across all service lines and geographies.

    “Indian brands have benefited from the rapid economic growth seen over the past ten years,” said Brand Finance’s Savio D’Souza. “Indian brands must take advantage of the improving business sentiment and invest in brand related activities like customer engagement, sponsorships, employee satisfaction and brand tracking to drive the next phase of growth in order for more Indian companies to join the global club of internationally recognised brands,” he added. The average brand value to enterprise value (BV/EV) for India’s top 100 brands is 12 per cent. However, some of the largest PSUs have an average ratio of 3 per cent. The BV/EV ratio shows the proportion of a company’s value accounted for by the brand.