Questioning independent directors is unfortunate, Cyrus Mistry says

Cyrus Mistry said that the independent directors were being questioned by Tata Sons for undertaking their fiduciary duty of protecting the shareholders of the companies of which they serve. Image Source: Reuters

Ousted Tata chairman, Cyrus Mistry, on Sunday night listed the number of independent directors that were being questioned by Tata Sons ‘for undertaking their fiduciary duty of protecting the shareholders of the companies of which they serve.’

“To question the independence of the directors by Tata Sons, is truly unfortunate given that the country acknowledges them as stalwarts of India Inc. To suggest that “ulterior objectives” and “clever strategy” can sway these eminent names in undertaking their fiduciary duties and in discharging the duties mandated by statute as independent directors is absolutely astonishing and really speaks to how low Tata Sons has unfortunately stooped in their public statements,” Cyrus Mistry said.

The list included names of board of directors from Indian Hotel Company Ltd (IHCL) and Tata Chemicals as well as Tata Trusts that followed individual strategies ‘in the spirit of protecting the interests of all stakeholders, employees, and minority shareholders,’ Mistry said he and added that to question their independence was a new low for Tata Sons.

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Deepak Parekh, IHCL; Gautam Banerjee, IHCL; Ireena Vital, IHCL; Keki Dadiset, IHCL and trustee on Tata Trusts; Nadir Godrej, IHCL; Nasser Munjee, Tata Chemicals; and trustee on Tata Trusts; Nusli Wadia, Tata Chemicals; Vibha Paul Rishi, Tata Chemicals and IHCL; Yashwant Thorat, Tata Chemicals.

Six of the above directors were appointed during Ratan Tata’s tenure, Mistry said.

“They are required, among other things, to bring to bear an independent judgment on issues of strategy, performance, risk management, resources, key appointments and standards of conduct. They are further required to safeguard the interests of all stakeholders, particularly the minority shareholders,” the statement said.

IHCL and Tata Chemicals, have still continued showing their support for Mistry as Chairman.

“…also reaffirmed that all the decisions taken with regard to the operations and business of the Company had been taken by the board unanimously and executed by the Chairman and management as per directions of the board,” the Independent Directors on the Tata Chemicals board said in a statement.

He also added that Tata Sons statement on operating companies drifting away was furthest from the truth.

Tata Sons said that they would do whatever is required to deal with the situation.

“In the light of the developments since November 4, 2016, Tata Sons reiterates that it is crucially important for Boards, including independent directors, to consider that their views and positions ensure that the future of Tata companies is protected, taking into consideration the interest of all stakeholders,” Tata Sons said.

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