In a high-drama meeting, 93.11 per cent shareholders of Tata Group's crown jewel TCS today voted to remove Cyrus Mistry as the director of its board.
Only 6.89 per cent of shareholders voted in favour of the ousted Tata Sons chairman Cyrus Mistry who said he was not hankering for office and his fight is to save the "soul" of the conglomerate.
Mistry was on October 24 removed as the chairman of Tata Sons which holds 73 per cent shares of Tata Consultancy Services (TCS).
Significantly, Mistry did not attend the extraordinary general meeting (EGM), which is the first of the seven the group has lined up through the rest of the month, but interim chairman Ratan Tata was present through the course of the meeting. Also, interim chairman Ishaat Hussain recused himself from chairing the meeting.
Even though Tata Sons' 73 per cent ownership made outcome of the voting a foregone conclusion, divisions within the minority shareholders on the contentious issue came out in the open with a few minority shareholders voicing support for Mistry.
As many as 38 shareholders spoke at the 150-minute long EGM. Even though a bulk of them voiced support for Tata, those handful who affirmed their support to Mistry were applauded.
Independent director Aman Mehta, who officiated the meeting after interim chairman Ishaat Hussain recused himself, said Mistry had lost "the trust and confidence" of the
promoter group (Tata Sons and Tata Trusts) which had nominated him and it was in best interest of TCS that he leave now.
Asserting that the core issue goes far beyond the "performance or competence", Mehta said, "It seems to me that the real issue here is one of trust and confidence of the promoter group in its nominated chairman."
"Independent directors of TCS have met separately and have reviewed the whole issue in some details. It is clear to all of us that the current issue can have some materially negative effect on the functioning of the company," he said.
Mistry told shareholders of TCS in a letter that "good governance" has been thrown to the wind in the past several weeks and replaced by "whims, fancies and personal agenda".
He said he was "fighting to save the soul of the Tata Group". Mistry's statement was read out at the EGM by the company secretary.
However, a few shareholders smelt arbitrariness in the reply and started speaking again seeking detailed replies which made Mehta wound up the meeting.
"All of you on the board don't think for yourself and depend on someone else for what you think. I have asked three-four pointed questions, where are those answers? You are talking in the air, be specific," Adil Irani, a discontent shareholder, said.
"Can you fire your driver or chaprasi (office boy) like this? He (Mistry) is my chairman, I want specific reasons why he was fired," Irani said amid the din.
Mistry, who abstained from the meeting leading to an empty chair among the 11-member board, despatched a statement asking the shareholders to vote by their conscience and asserting he was not hankering for office.
"We have witnessed an unmatched erosion of ethical values and the very foundation of the institution being put to grave risk by the conduct of a few," he said.
Results of the vote will be keenly awaited for it will indicate how the institutional shareholders have voted, which can have a bearing on other Tata Group companies which have called similar EGMs and where the promoter holding is as low as 28 per cent as well.
Foreign portfolio investors own 17.02 per cent in TCS, 4.1 per cent is with insurance companies, while 1.03 per cent is with mutual funds, domestic financial institutions and banks.
In a surprise move, Tata Sons removed Mistry from chairmanship on October 24, leading to a series of allegations and counter-allegations by either side in what is described as the biggest corporate battle in recent times.
Mistry has found support at multiple boards, including Indian Hotels and Tata Steel, while some like Tata Motors have been divided houses. Each of the big six companies have called for EGMs to oust him from directorships this month.
At the EGM, those supporting the motion to dismiss Mistry as a director gave a slew of reasons including legacy of the Tata Group, value erosion which the events have caused, need for a 'Tata' to continue at the helm and even avoiding bickerings within the small Parsi community.
"The group's 149-year-old legacy is getting destroyed in this fight," a long time shareholder Ashalata Maheshwari said at the meeting.
The theatrics reached a crescendo with at least two shareholders showing their willingness to sacrifice their lives for the wishes of Ratan Tata.
Meanwhile, shareholders sympathetic to Mistry, a very small minority among the speakers, stressed on the specific reasons for his dismissal, stating that the company has performed better under him.
"The majority is not always right. By passing the resolution we may win the battle but are losing the war," said one of the shareholders.
(With PTI inputs)