Cyrus Mistry, the ousted chairman of Tata Sons, got full support from independent directors on the board of Indian Hotels Company (IHCL) on Friday.
Ahead of the board meeting of IHCL, the directors said they had full confidence in his strategy and leadership.
The directors included Deepak Parekh, Vibha Paul Rishi, Gautam Banerjee, Nadir Godrej, Keki Dadiseth and Irena Vittal.
On the other hand, the directors and trustees of the board are looking to remove him as chairman of the other group companies, according to media reports. They cite a “ trust deficit” in his style of functioning.
Though Mistry was removed as the chairman, he is still a director on the board of Tata Sons. His family owns 18.4% stake in Tata Sons, the holding company of Tata Group.
The Tata Trust holds 66 percent stake in the company and under Mistry’s helmsmanship, the Trust was sidelined with no company information shared, say people in the knowhow, reports Bloomberg.
Also, the holding company was totally dependent on the two performing assets of the company with Tata Consultancy Service Ltd. carrying the burden.
After his removal, Mistry had said that the group may face 1.18 trillion rupees ($18 billion) in write downs because of five unprofitable businesses he inherited.
The trustees insist that none of it was conveyed to the board during his four years of tenure.
V R Mehta, a trustee of the Sir Dorabji Tata Trust — one of the largest shareholders in Tata Sons — said Mistry did not share any of his concerns in a timely fashion, writes Bloomberg.
The Welspun Energy deal worth 92.49 billion rupees that Mistry signed was not revealed to the board.
Mistry on his part has refuted all these allegations and reiterated that Ratan Tata was kept abreast of all such developments. He has also questioned certain decisions taken by the board along with the ex-chairman like the joint venture with Air Asia and Singapore Airlines and some questionable investments.