Cyrus Mistry and Ratan Tata
Mumbai: Tata Steel on Friday elected former banker O.P. Bhatt as Chairman of its board, and said it will pursue the removal of former chair Cyrus Mistry as a director on the board.
In a regulatory filing with the BSE, the company said that its board of directors through a circular resolution passed by majority consent elected Bhatt as the Chairman of its board.
"The board of directors through circular resolutions dated November 25, 2016, passed by majority consent, has decided to replace Cyrus P. Mistry as the Chairman of the board with immediate effect and have elected O.P. Bhatt, an independent director as the Chairman of the board," the company said in a filing with the BSE.
Bhatt was appointed an independent director of the company on June 10, 2013. He has served as the Chairman of State Bank of India (SBI).
"Bhatt will serve as Chairman till the outcome of the extraordinary general meeting (EGM) of the company," the filing said.
The company will hold its EGM on December 21.
"The board appointed the independent director as the 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," the filing said.
"This decision was taken to also ensure stability to the company and in the larger interest of Tata Steel's stakeholders, including but not limited to employees, trading partners, financial stakeholders and local community around its operations."
In another regulatory filing, Tata Steel informed the BSE that its board of directors has decided to convene an EGM to consider and if thought fit, to pass the resolutions to remove Mistry and Nusli N. Wadia as directors of the company.
"Tata Steel has informed BSE that the board of directors of the company at its meeting held on November 25, 2016, decided to convene an EGM," the regulatory filing said.
"Pursuant to the special notice and requisition dated November 10, 2016, received from Tata Sons, promoter and principal shareholder of the company, holding 29.75 per cent of the paid-up ordinary share capital of the company, to consider and if thought fit, to pass the following resolutions -- Removal of C. P. Mistry as director of the company, removal of Nusli N. Wadia as director of the company."
According to sources close to Mistry, the level of corporate governance in Tata Group's listed companies have hit a new low.
"We believe that this unprecedented erosion of core Tata Values, is seriously damaging Brand Tata. Each time one thinks the current standard of corporate governance in Tata Group listed companies under the leadership of the interim Chairman cannot hit a newer low, one has been belied," Sources close to Mistry said.
"Just minutes before a convened and pre-scheduled board meeting, a circular resolution replacing the Chairman for the meeting is said to have been initiated."
"Those involved are representatives of Tata Sons, those drawing large remuneration from other Tata Trustee-controlled companies, and an "independent" director, who is the wife of a newly-inducted Tata trustee, who is also recently nominated director of Tata Sons."