MUMBAI: Indian Hotels’ shareholders urged Cyrus Mistry to not drag Tata Group to the court while requesting independent directors Deepak Parekh and Nadir Godrej at the extraordinary general meeting to intervene between the two battling shareholders Ratan Tata and Mistry before share prices take a further beating.
The EGM was termed infructuous after Mistry voluntarily stepped down from all listed Tata Group companies, making the resolution to vote him out unnecessary. However, shareholders expressed their opinions and advice with great enthusiasm, as Mistry vowed to fight until his last breath.
“I have seen many corporate battles. Mistry is an intelligent and knowledgeable person. Taking the group to the court is indigestible for me. This will lead to more loss to market capitalisation,” said a shareholder. “I request him not to go to the court and leave gracefully.”
Shareholder Homa Purdehi felt well wishers of the Tata Group should come forward to resolve this issue as soon as possible. “Deepak Parekh and Godrej should intervene to save Tata brand. Our Parsi community’s name is getting disgraced. You are responsible, Mr Parekh and Mr. Godrej, this must be stopped,” she said.
Jayesh Manik, the last shareholder who spoke at the EGM, advised Tata Group and Shapoorji Pallonji Group to hold “Maha Yagna Puja” at their premises to solve the fight between the groups.
Earlier this month, six shareholders of Tata group companies have moved Bombay High Court claiming damages from Tata Sons interim chairman Ratan Tata and 29 others for losses suffered by investors after shares of key group companies fell following the sacking of Cyrus Mistry as group chairman in October.
Shobhana Mehta, another shareholder present at the EGM on Tuesday, said only media will benefit from the ongoing battle between Mistry and Tata. “The legal fight will lead to losses to our shareholder value and Tata brand. Only media will enjoy the fight.”
Only Rakesh Sarna, Deepak Parekh, Mehernosh Kapadia and Nadir Godrej attended the EGM. Other directors Shapoor Mistry, Keki Dadiseth, Ireena Vittal, Vibha Paul Rishi and Gautam Banerjee were missing from the podium. Tata Sons interim chairman Ratan Tata was present in his dapper blue and white checked shirt and black pants. He was flanked by Tata Trusts trustees NA Soonawala, R Venkataramanan and RK Krishna Kumar.
“Deepak Parekh should become the Krishna of independent directors. Ultimately legal battle should not happen,” said shareholder Vimal Bhatt. “It is the role of independent directors on IHCL board to get the fighting parties to the negotiating table.”
Anil Goel makes a comeback
Former Indian Hotels CFO Anil Goel made a surprise entry to defend the Sea Rock acquisition, overseas buyouts and counter Mistry’s claims of Tata Trusts interfering in business decisions.
“I have been shocked at the allegations by made in the last few weeks. The Searock acquisition was a pre-emptive investment to expand footprint. Our analysis was based on 3rd party valuations. The project ran into hurdles because of the complicated approvals,” he said at the EGM.
He also defended the overseas buyout by saying that the board does not have the benefit of hindsight when it takes decisions as the business environment between 2005 and 2009 was different from the 2012 and 2016.
Mistry has spoken about missteps made by his predecessor about the hospitality company’s acquisitions of the Sea Rock property in Mumbai and The Pierre in New York.
In a letter addressed to the board of directors of IHCL dated December 5, Mistry had mentioned that the Sea Rock project had blocked capital and was losing value, and that the company had also re-acquired direct ownership of Sea Rock companies in October 2015 which has helped reflect the appropriate value of the asset and has helped the company refinance it at competitive rates.
“Instead of overindulging about why we did what we did in 2005 the challenge is to see what to do in the changed environment. We followed a course correction subsequently and got approval for balance sheet restructuring,” he had stated.
Before exiting the EGM Goel said the Tata Trusts never coerced him for information they were not entitled to.