Sebi keeps a close tab on Tata-Mistry feud

Mumbai: The capital market regulator Securities and Exchange Board of India (Sebi) is closely monitoring the current feud between Tata Sons and Cyrus Mistry with both the camp fighting it out in the open to wrest the management control of listed Tata group firms.

While Cyrus Mistry was removed as the chairman of the Tata Sons, he continues to remain chairman in several listed Tata group firms.

According to sources familiar with the development, the regulator is more concerned with the protection of the interest of public shareholders and alleged violations of corporate governance norms. The regulator is keeping a close tab on the developments happening at the board level as well as at the extraordinary meeting of shareholders convened by Tata Sons seeking the removal of Mr Mistry from the board.

Sebi has also received representations from several institutional investors, investors associations and corporate governance firms.

Last week, TCS ousted Mr Mistry as chairman and appointed Ishaat Hussain in his place.

However, Mistry’s  camp retorted saying that the due process of law wasn’t followed while removing and appointing a new chairman.

Additionally, Tata Sons had issued a notice for convening an extraordinary meeting of shareholders of Tata Steel and Tata Motors for the removal of Mr Mistry and Nusli N Wadia from the board of the respective firms.  

The ongoing tussle gained further momentum after a section of the independent directors of Indian Hotels and Tata Chemical affirmed their faith in the leadership of Mr Mistry and the current management team.  

“The real issue is of allegations and counter allegations, questions on governance, independence and so on. All issues must be clarified by Tata, as the investors, stakeholders and regulators need to know the truth. Not only this, the reputation of ‘Tata brand’ is at stake now. And they are duty bound to their stakeholders to bring the facts out so as to minimise damage,” said J.N. Gupta, MD at Stakeholders Empowerment Services, a corporate governance firm.