Cyrus Mistry was ousted as the chairman of Tata Sons on October 28, voted out unanimously by its board.
While the Tata and Mistry camp may have quietened down after their very-public spat, Tata Sons is collecting its arms to push one of its largest shareholders out. And it may just have the power to do so.
The Mistry family - through Cyrus Investments and Sterling Investments - own 18.4% in Tata Sons. On October 24, the board of the salt-to-hospitality conglomerate decided to vote Mistry out as its chairman. What ensued was a very public battle, with murky details of boardroom drama spilling out for everyone to see.
A report by the LiveMint said Tata Sons', with its articles of association, can ask its shareholders to sell their stake by passing a special resolution. According to it, Tata Sons' Article 75 says, "The company may at any time by Special resolution resolve that any holder of ordinary shares do transfer his ordinary shares. Such member would thereupon be deemed to have served the company with a sale notice in respect of his ordinary shares."
According to the report, the Tata Group had already approached "a large Indian state-owned financier, a foreign state-owned investment company and one of the largest pension funds in the world."
As early as October 28, 2016, only four days after the Tata Group ousted its chairman Cyrus Mistry unaminously in a boardroom meeting, there were reports that Ratan Tata, the then interim chairman, was looking for a buyer for Mistry family's stake if it were to become available. At the time, reports had suggested that Tata Trusts was in talks with potential sovereign wealth funds and long-term investors to understand their interest in the Mistry family's stake. Tata Trusts back was trying to ensure that the new investor is "a friendly party that shares its long-term vision.
The Mistry family's stake is valued at $16 billion (approximately Rs 1.06 lakh crore). At the time, there were reports that Tata Group was also contemplating buying out the stake themselves.
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