Not worried about boardroom battle at Tata Group, says SBI
12 Nov 2016 11:52 PM GMT
State Bank of India, which has a large exposure to Tata Group, on Friday discounted the fear of the boardroom battle between promoters and ousted chairman Cyrus Mistry affecting performance of the companies.
“Tata Group companies have been built by professionals, so what the owners do amongst themselves doesn’t really concern us directly as long as we can see the companies continue to operate in the way they were operating and in a way that gives us the comfort that yes, the right things are getting done,” SBI Chairperson Arundhati Bhattacharya told reporters.
Refusing to disclose the quantum of loans to the Tata companies, she said, “The fact of the matter is each of these Tata group companies is actually handled by professionals and they are continuing to run them. So, there is no discontinuity over there.”
As the Ratan TataCyrus Mistry spat shows no sign of abating, the possible role of government-owned insurance companies that hold significant stakes in the several publicly-held Tata companies is coming into sharper focus.
A resolution to remove Mistry would require to be approved by a 51% vote in its favour and the sup port of the government-owned financial institutions will come in handy for the Tatas.
Government sources said representatives of financial institutions appeared to be sympathetic towards Mistry and they had not liked the manner in which Mistry was ousted as chairman of the Tata Sons boards.
The Tatas, led by interim chairman Ratan Tata, are in an open war of words with Mistry after the latter was shown the door on October 24. On Thursday, the Tatas removed Mistry as chairman of its flagship TCS and appointed Ishaat Hussain as interim chair.
On Friday, promoter Tata Sons asked Tata Motors, TCS, Indian Hotels and Tata Chemicals to convene extraordinary general body meetings of shareholders to remove Mistry and some independent directors like Nusli Wadia from their boards.
Mistry may up offensive against Tatas next week
As the board-room battle intensifies, ex-chairman of Tata Sons Cyrus Mistry is likely to up the offensive next week once the Tata group companies that he chairs come out of the mandatory silence period before their quarterly earnings.
The board of Tata Motors, which is the second biggest cash-cow in the over 100-companies group from Bombay House entities, will meet next Monday to clear the quarterly numbers as well as may discus whether to repose faith in Mistry or not.
If the sources can be believed, that is precisely what Mistry, who was also removed last night as the chairman of the Tata Group crown jewel TCS, has up his sleeves.
Mistry was unceremoniously sacked as Tata Sons chairman on October 24.
Tata Sons is one the main group holding companies.
“Mistry has been lying low because he has fiduciary responsibilities to all the companies that he chairs. He will chair the board of Tata Motors, which is the last main group company, on Monday.
“With that he is likely to break the long silence.
Come November 15, you may hear a lot from him,” the source close to mistry camp, told.
The source further said the Mistry camp has “enough ammunitions to counter every baseless claim” by the Tatas.
Tata holds most shares in the company.Since his ouster last month, the Tatas or Mistry has not spoken to the media. While Tatas has sent out two formal communications since then, including a 9-pager today, the Mistry camp issued one formal statement last week.
With Friday,s claims and counter-claims, there seems to be more escalation in the board room battle
between the Tatas and the Mistrys who own 18.4 per cent in the group.
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