Voting by minority shareholders shows reform needed in Tata firms: Mistry

Mumbai: A day after being voted out as TCS' director, Cyrus P Mistry on Wednesday took the moral high ground, saying over 70 per cent of non-promoter shareholders either voted against the resolution to remove him or abstained.

He said the voting by minority shareholders of Tata Consultancy Services (TCS) has sent a strong signal that the need for governance reform at Tata group must not go unheeded.

Mistry also vowed that he would continue to work at various forums to be voice for change in the Tata group, its governance and protection of stakeholders' rights.

In a letter of thanks to the public shareholders of TCS, Mistry said: "I wish to remind all that polls at shareholder meetings are not a reflection for clamour for office or retribution for the breakdown in the rule of law in the Tata Group in recent weeks."

Stating that the outcome of TCS EGM was a foregone conclusion, he said: "Over 70 per cent of non-promoter TCS shareholders either voted against the resolution to remove me or abstained. This meant nearly 20 per cent of the total votes in TCS (the promoters hold 73 per cent of the total vote)."

He further said: "A reported 78 per cent of the votes cast by retail investors was against the resolution to remove me and nearly 43 per cent of the votes cast by institutional investors were against the resolution to remove me."

The voting in TCS is therefore, a strong signal from minority shareholders that the need for governance reform must not go unheeded, he added. According regulatory filing of the extraordinary general meeting (EGM) held yesterday, 86.71 per cent of the 197.04 crore shares voted.

Of the votes polled, 93.11 per cent voted for his removal and 6.89 per cent were against the resolution brought by the promoter, Tata Sons Ltd. Out of the 8.78 crore retail shareholders, 1.55 crore voted on the resolution, 78 per cent, or 1.21 crore of which voting against the resolution.

But this vote against the resolution may have included Mistry's own votes as well. According to the latest annual report of TCS, Mistry held 41.63 lakh shares or 0.21 per cent shares of the company as on March 31, 2016.

Considering he would have voted against the resolution brought by Tata Sons, less than half of the negative votes for the resolution may be his own.

His shareholding made up for 35 per cent of the negative vote for the resolution. Interestingly, less than 18 per cent of the 8.78 crore retail shareholders voted.

According to the regulatory filing, all of the 144.48 crore promoter-held shares, constituting 73.32 per cent of the total shareholding, voted for the resolution to remove him.

Of the 43.79 crore institutional holding, 56.69 per cent participated in the poll, with 14.25 crore favouring Mistry's removal and 10.55 crore being against the resolution.