EXCLUSIVE: Mistry's ouster from group cos may run into months

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26 Aug, 2025 12:21

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Gaurav ChoudhuryMoneycontrolCyrus Mistry’s ouster as Tata Sons Chairman on Monday was abrupt and sudden, but his removal as Chairman of the string of group companies, unless he steps down voluntarily, may turn out to be a long-drawn affair running into months.On Wednesday, two days after his dismissal as the Tata Sons Chief, Mistry presided over a regular board meeting of Tata Global Beverages, Reports suggest that the meeting was held at Bombay House and lasted for over four hours where the company's operations and progress were discussed.On Friday, the board of Tata Tele Maharashtra Limited (TTML) will meet to discuss and ratify the second quarter financial results. Sources told Moneycontrol that Mistry, who is the chairman of TTML, is unlikely to attend the meeting.“The TTML managing director or the CEO usually presides over the board meeting and minutes and other documents are sent to the chairman,” the source said.Each of Tata group companies are distinct legal entities bound by separate Articles of Association (AoA). The boards of each of these companies will have to pass a special resolution and Mistry will have to be served a show cause notice.The chairman, who is sought to be replaced, has the right to represent his views and the matter can be put to vote. Mistry serves as a Tata Sons nominee chairman on each of these boards. Except software company TCS where Tata Sons holds more than 70 percent, its stake in the other companies are about 30 percent.This will make it necessary for the boards of these companies to secure the concurrence of other large shareholders such as financial institutions to replace Mistry as the chairman.The boards will have to go through the lengthy rigmarole under the Companies Act, 2013, remove a chairman or a director. An extraordinary general meeting (EGM) has to be convened under Section 169 of the Companies Act.Section 169 and Chapter 7 of Companies Act, 2013 Right of For instance, a “special notice” of the intention to move a resolution for the removal of director need to be furnished to the company at least 14 days before the meeting at which it is to be moved.Shareholders have the right to decide the date of meeting. However, the special notice shall not be sent earlier than three months from the date of meeting but at least 14 clear days before the date of the meeting, at which the resolution is to be moved.Immediately after the notice of intention, the company shall notify its shareholders. “If is not possible for the company to give notice to all the members, publish by advertisement in the newspaper having an appropriate circulation not less than 7 days before the meeting,” a Delhi-based corporate lawyer said, requesting anonymity.The company must intimate the concerned director, Mistry in this case, of the intended resolution. “The director or the chairman shall have the right to be heard on the resolution at the meeting,” the lawyer said.Under the Companies Act, 2013, Mistry can make a representation in writing against his removal and request the company to notify it to the shareholders. That said, under law, the shareholders right to remove a director through a special resolution in an EGM.“This legal right cannot be damaged or taken away by the memorandum of association, AOA or any other documents or agreement,” the lawyer quoted earlier said.