Cyrus Mistry, ousted as Tata Sons chairman in October, has petitioned India's Company Law Tribunal to replace the holding company's entire board and investigate whether it violated insider trading law,
the
Financial Times
reported.
Mistry's family controls an 18% stake in the company, the
FT
article said.
Tata Sons has accused Mistry of being motivated by “deep animosity” toward Ratan Tata, his predecessor, who is now Tata Sons' interim chairman, the article said. “Their increasingly bitter feud has raised concerns among investors and other Indian business executives that long-term damage is being done to a group that has long been a source of national pride,” the
FT
report said.
Mistry advocates revamping “the Tata Group's unusual governance structure,” the article said. “The Tata Trust charities own 66% of holding company Tata Sons, which in turn holds controlling stakes in the group's operating businesses.” Ratan Tata chairs the trusts. Mistry alleges that Tata “has sought inappropriate influence over the strategic decisions of operating companies,” the
FT
article said.
Analysts at proxy advisory firm Institutional Investor Advisory Services recently wrote “that the trusts' nominated directors should be stripped of their right to veto Tata Sons' board decisions,” the
FT
reported.
“The combined market capitalisation of the listed Tata companies has fallen by Rs694 billion ($10.2 billion) since late October,” the article said.
Mistry told the
FT
, “The behaviour of Tata Sons is what creates the loss of value. My idea is to make sure that we reform to make sure these actions don't happen again.” (Source:
Financial Times
, Dec. 22, 2016.)
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