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Why did Cyrus Mistry skip the board meetings of Tata Sons and TCS? According to a source close to Cyrus, because Mistry believed they lacked legal legitimacy.
“The proceedings of the board meeting of Tata Sons on October 24, where Mistry was unseated, are illegal and bad in law. Decisions made in that meeting are not legally tenable,” this person told BusinessLine , adding that any meeting of Tata Sons that Ratan Tata chairs, such as Thursday’s, is also illegal. The logic holds true for TCS as well.
Asked for a response, a Tata Sons official wondered how on the one hand a full board, meeting and taking a decision, could be termed ‘illegal’, but a section of the board meeting separately and making a communication to the exchanges could be legal. He was referring to a meeting of the independent directors of Indian Hotels and their communication of support for Mistry to bourses.
It is understood that there was no proposal tabled before the Tata Sons board to call an EGM to oust Mistry as director. “The agenda only reviewed the last six months’ accounts apart from other routine matters,” said the official.
The Mistry camp believes that such a proposal would amount to infringing on minority shareholder rights and can be legally contested. “There are lots of moving parts and Tata Sons is using the might of numbers to push through its agenda. Let’s see,” was the response of the person close to Mistry.
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