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Exclusive: This Is Not A Court Hearing, Cyrus Mistry Was Told When He Objected

Exclusive details provided to NDTV by at least two insiders privy to the events (one of them was present at the meeting) suggest that the countdown to Cyrus Mistry's removal led to acrimonious, unprecedented scenes inside the boardroom.
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Cyrus Mistry's exit was not - perhaps deliberately - listed on the board agenda.

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Cyrus Mistry's exit was not - perhaps deliberately - listed on the board agenda.

Highlights

  1. Mistry's removal was not on agenda, introduced as 'residuary' item
  2. Mistry protested removal strongly, may challenge in court today
  3. Tata board claimed had 'legal opinion', following global precedents
Board meetings of Tata Sons are normally staid, predictable affairs. 

But not the meeting on Monday which led to the shock exit of the company's chairman, Cyrus Mistry. 

The company removed Mr Mistry, almost four years after he became its first chief from outside the Tata family, and brought back Ratan Tata, 78, who has taken interim charge until a successor is appointed. 

"The board in collective wisdom and on recommendations of principle shareholders took a decision to change for long-term of interests of Tata Sons and Tata Group," a Tata Sons spokesperson said. 

Exclusive details provided to NDTV by at least two insiders privy to the events (one of them was present at the meeting) suggest that the countdown to Mr Mistry's removal led to acrimonious, unprecedented scenes inside the boardroom. 

Mr Mistry's exit was not - perhaps deliberately - listed on the board agenda. An insider told NDTV that it was brought up as a 'residuary' item, under the 'any other items' category, listed at the end of every board agenda. 

When it came up, Mr Mistry is said to have protested, calling it an illegal move. 

He is said to have pointed out that according to the Tata rule book, a 15-day notice has to be given before bringing such an item before the Board, a timeframe, he said, in which he could have made a case for himself. 

But the Board is said to have told him "we have legal opinion" in support of the decision. Mr Mistry asked to see the opinion; the board reportedly told him "this was not a court hearing". 

At this point, Mr Mistry said he would challenge the decision. Reports suggest he may move the Bombay High Court as early as Tuesday. 

Of the nine-member board, six voted in favour of his removal, two abstained. Mr Mistry, as the ninth member, refused to be part of the process. 

He however remains a member of the Tata board, as well as a Director of the company. 

Another board insider told NDTV that the decision to remove Mr Mistry has been weeks, perhaps months, in the making. The decision, he said, "was not based on pique", but entirely on Mr Mistry's dismal performance as CEO. 

Only two of Tata's multiple companies are profitable, he said, almost all the others are struggling. 

Asked why Mr Mistry's ouster lacked the traditional courtesies favoured by the Tata group, the insider said they were simply following global precedent, where a "guillotine" approach is favoured when removing high executives. 

In a letter to employees on Monday, Ratan Tata wrote that "in the interest of the stability of and reassurance to the Tata Group," he is returning as Chairman. 

Mr Tata also wrote to PM Modi informing him of the change.

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