Tata Trusts has powers to remove Tata Sons chairman

A day after Cyrus Mistry ouster as a chairman of Tata Sons Ltd, there was a lot of conjecture around the board room mutiny, but many of them...

A day after Cyrus Mistry ouster as a chairman of Tata Sons Ltd, there was a lot of conjecture around the board room mutiny, but many of them don't seem to be grounded in facts. According to the Tata Sons's articles of association says that Tata Trusts, its largest shareholder gave itself special powers in nominating, approving and removing chairmen of Tata Sons in late 2012 months before Cyrus Mistry took over the top job in December that year. The media reports have said that there were conflict of interest perturb raised about the grant of contracts to companies belonging to the Shapoorji Pallonji Group, which is run by his family after Mistry took over. on 30 October 2013), Sources says that Mistry had written to Tata group companies on October 2013 that no contracts were to be awarded to the Shapoorji Pallonji Group. It couldn't independently intuit the accuracy of this claim and hasn't seen a copy of this letter.

On the Monday evening, Tata Sons said that the board had replaced Cyrus Mistry as chairman and that Ratan Tata would be interim chairman. A selection committee including Tata was mandated to find a replacement for Mistry in four months. Still the reasons for Cyrus Mistry's hasty removal remain unclear, there is no doubt that the board of Tata Sons has the power to do so. 

In the stock exchanges Intra-day trading on Tuesday shares of Tata Group companies fells. Tata Global Beverages Ltd declined 3.3%, Tata Steel Ltd fell 4%, Tata Consultancy Services Ltd barn 1.2%, Tata Motors Ltd was down 2.2% and Tata Power Co Ltd lost 1.44%. The benchmark Sensex index was down 0.1%.